I have had a number of clients come to me with family homes that are still titled in the name of a deceased relative. They continue to pay the note on the house if there is one and pay the taxes when they become due.
If this goes on too long, it can create some serious problems. Plus, with the original owner of the home now deceased and remaining on title, what insurance is there on the house? No one technically has an insurable interest until they’re on title.
As time passes and lineal descendants of the original homeowner move or die, restoring marketable title becomes a complex, time consuming, and potentially expensive endeavor.
What Happens to my house when I die?
The answer to this legal question, as well as many others, is it depends. For sake of conversation, let’s consider the following scenario:
Ken and Kristina Brown have two children, Otis and Gabby. Ken and Kristina bought their house from ABC Builders. When Ken and Kristina got title to the house at closing, they were provided with a deed that says: ABC Builders, Grantor, for valuable consideration paid, grants with general warranty covenants to Ken Brown and Kristina Brown, Grantees, all interest in the real property described in the attached legal description…. The address of the property is 123 Main Street, Anytown, Ohio 43215
Ken and Kristina live in that home for the next 50 years. Otis gets married and has two sons, Henry and Hector. Gabbie also gets married and has daughters, Izzy and Mary.
Otis gets divorced from his wife and moves back to the family home to take care of his parents. Kristina is thrown a surprise party on her 97th birthday. After blowing out the candles and eating her cake, she is called home, and peacefully passes away instantly with all of her loved ones around her.
Ken collapses the next morning from an aneurysm.
Hector becomes a teacher and adopts three of his students, Alvin, Simon, and Theodore, whose parents died in a house fire. Henry continues dating his high school sweetheart and they have one daughter together, Henrietta. Izzy has two children of her own, Luke and Leah. As Otis gets older, living in Anytown, Mary decides to move in with her Uncle to help him as he ages. Mary is attending the University of Anytown. As a perk of moving in and to keep Otis from having to go into a nursing home, Otis tells Mary she can keep the house after he dies.
Gabbie and Izzy decide to go visit Otis and Mary. While on the way to a scheduled doctor’s appointment for Otis, a semi-truck goes left of center and hits the car carrying Izzy, Gabbie, and Otis. Mary was at class during the accident. Henry, while on a cruise, comes down with Ebola and dies. Hector is struck by lighting, his heart stops immediately.
Mary comes into the office to probate her uncle’s estate. She shares with the attorney that her Uncle Otis told her she gets to keep the house for moving in with him at the end of life to take care of him. The attorney pulls the deed to the home and finds that title is still held by Ken & Kristina Brown. What’s the outcome?
A LOT OF PROBATE
Unfortunately, this is a situation that has actually walked into our office. In our real world case, “Mary” actually lived with her uncle “Otis” for the last twelve years of his life. She had made significant sacrifices to help Otis finish his life in the family home with the belief she was inheriting it.
While the fact pattern has a number of legal issues, I want to callout the deed that Ken and Kristina (the original couple) received when they bought their home. They were holding title to their home as joint tenants. As a result, when either Ken or Kristina pass, the interest of the deceased spouse will have to go to probate. There are options to avoid this, you just need to know the magic language.
THERE’S GOT TO BE A BETTER WAY!
There is! Fortunately, there is a lot that can be done to real property to keep clients in control of the property’s future and keep it out of probate.
Title work to your home is not something you want to try to do on your own. If your home has a significant title defect, banks will refuse to make loans on the property. Legal work is about like dentistry. A lot of work can be done on your own (brushing and flossing). However, if you need a cavity filled, you really want a dentist holding that drill.
Best Practices?
It is best to update the title to your home after there is any change in circumstances of the titled owners. The benefit of having a relationship with a local lawyer, we’ll tell if there is something you need to do. Do not delay as the case that is outlined above, it will require the filing of as many as seven probate estates. Don’t let this happen to your family home.
