One of the most frequent problems I see in probate is improper titling on the deed for the home. Many couples believe because they bought the house together, they own it together and when one of them passes the home automatically goes to the surviving spouse. What most couples don’t realize is the deed is what controls ownership, not how the home was purchased.
A home is usually either titled “Joint Tenancy in Common” or “Joint With Right of Survivorship”. Joint Tenancy in Common means each spouse owns one half of the home. When a spouse dies, the home is then owned one half by the deceased spouse’s estate and must pass through probate, even if the surviving spouse is named as the sole beneficiary in a Will. Joint With Right of Survivorship means the home passes automatically to the surviving spouse without probate.
Making sure your home is titled correctly so that the transition is as easy for a surviving spouse as possible is important, and perhaps best of all, it’s easy! With a single Quit Claim Deed you and your spouse can have the peace of mind knowing that each is taken care of and will avoid the headache of probate when it is unnecessary.
A number of clients also ask if they can just put their name on their parent’s home to prevent probate. While the short answer is yes, there are some key considerations to keep in mind. When the home is eventually sold after the parents’ deaths, there are taxes on the capitals while a transfer on death would have resulted in a stepped-up basis and possibly no capital gains. In addition, part of the home is considered their asset for taxes, loans, refinancing a mortgage, debt and lawsuits. If a child gets into a car accident, part of mom and dad’s home could be subject to a lawsuit from that accident. A better solution would be to put the home in a trust and name the child as a Co-Trustee or successor Trustee.
Good planning and correct titling of a deed can make a world of difference for probate and asset management during life.
Our firm works with families and assets of all sizes to develop plans that grow with you through life. Contact Grissom Law, LLC today at 678-781-9230 to schedule an appointment to discuss your needs.
Disclaimer
This Blog/Web Site is made available for educational purposes only. In addition, it is available to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.