It's been said that most people pass away and leave behind their most valuable asset – real estate. When a home is part of an inheritance, as it usually is, things can get tricky. For more information, read on.
Wills, Deeds, and Probate: What to Know
If a current living spouse is in the picture, most states have provisions to protect their interests even if the will failed to address the home. Spouses often, though, inherit the home because their names are on the deed. If they are not mentioned on the deed, each state has rules about who can inherit the property. In some states, if there are children, ownership of the home is divided equally between the spouse and any adult children. In the event someone passes away with no will (intestate), the estate is probated (including the home) using the state's plan of succession.
Probate, though, is not inevitable when it comes to the family home. Deeds can be changed while the owner of the home is living to reflect a number of designations. For instance, a so-called right of survivorship deed protects the homeowner while instructing that the home passes automatically to anyone else listed on the deed. The main owner cannot be removed from the deed and the home cannot be sold without the permission of all those mentioned on the deed. This type of deed means the home does not have to be probated. However, even though you can keep a large asset like the family home out of probate, it may not solve every issue connected to it.
Dividing a Home
Whether the home passes seamlessly to others, the laws of succession take over, or the home is willed to several siblings in a will, the home will still need to be somehow dealt with. Some ideas for doing that include:
- Own the home together with others. Divide any home maintenance expenses between the owners. This method can also be used to rent the home to third parties.
- Sell the home to a third party and divide the proceeds equally.
- If one owner wishes to own the home themselves, they can buy out others on the deed. This can be accomplished using property, cash, estate assets, a bank loan, or a private loan from the others on the deed.
There is much that can be done when it comes to estate planning to ensure the smooth handling of the family home. Speak to your estate planning lawyer to learn more.