If you are involved in helping a parent sell a home after the death of the other parent, the first thing you’ll need to know is how your parents held title or owned the home. This is according to the recent article “Home ownership after the death of a spouse” from nwi.com. In most cases, the home is owned by a couple as “joint tenants with rights of survivorship” or as “tenants by the entirety.” The latter is less common per Beck & Lenox Estate Planning & Elder Law, LLC. So, how does home ownership transfer after a parent dies?
Tenancy by the entirety is a form of ownership available only to married people in a limited number of states and offers several advantages to the owners. It creates an ownership interest where the spouses own property jointly and not as individuals. That means if you own that joint property with a spouse, you may not transfer your interest without your spouse’s permission because you own it as a unit. It also creates the rights of survivorship, so that the surviving spouse owns the property by law when the first spouse dies.
Joint tenancy with rights of survivorship is similar to tenants by the entirety, in that they both convey rights of survivorship. However, joint tenancy does not treat the owners as a single unit. In joint tenants, if one of the tenants want to transfer their interest in the property, he or she may do so at any time—and do not need the permission of the other tenant. This has led to some sticky situations, which is why tenants by the entirety is preferred in many situations.
If your parents own their home as tenants by the entireties or as joint tenants with rights of survivorship, the surviving spouse owns the home as a matter of law, and legally, ownership begins at the moment that first spouse dies.
Different states record this change of ownership differently, so you’ll need to speak with an estate planning attorney in your community (or the state where your parents lived, if it was different than where you live).
To notify the recorder’s office of the death, some state laws require the submission of a surviving spouse affidavit, which puts the recorder and the community on notice that one of the owners has died and the survivor now owns the home individually. Here again, an estate planning attorney like the ones at Beck & Lenox will know the laws that apply in your situation.
There was a time when people recorded a death certificate, but this does not occur often. The affidavit explains the important details, and the recorded document proves the change of title.
In most cases, there is no need for a new deed, since the surviving spouse owns the property at the time of death, and the affidavit itself demonstrates proof of the transfer of title in lieu of a deed.
Beck & Lenox offers a complimentary meeting with clients after the death of a spouse to review important actions that are needed. We also offer Trust and Probate administration should settling the estate prove to be too cumbersome or complicated for the heirs. Questions like, “How does home ownership transfer after a parent dies” are easily answered and handled for the spouse.
Reference: nwi.com (March 14, 2021) “Home ownership after the death of a spouse”