When one co-owner of a home dies, what happens? Does the deceased person’s will control what’s next for the home ownership? Not necessarily.
When a co-owner of real property passes away, how the co-owners vested their title is the threshold question. So, the surviving owner turns to the deed. Its language states how the property is owned.
The deed represents the title’s transfer from one owner to the next, and is proof of ownership. It tells how the property will transfer again upon a co-owner’s death. It tells us if the title passes to the survivor by way of survivorship rights, or if, instead, the property will need to be redistributed through the local probate court.
After its named owners acquired their house, the county recorded the deed and sent a copy to the owners. If the deed is impossible to find, check for the county’s online registry system. Homeowners can also get a copy of the house deed here, at Deeds.com.
When the Living Co-owner Holds Survivorship Rights
Co-owners can be named on the deed as having both a present interest in a home and a right of survivorship. Often, life partners, including married couples, own their home as joint tenants with rights of survivorship.
In this case, what should the surviving owner do? Take the death certificate to the county courthouse. There, the recorder’s office can help the surviving co-owner file an affidavit of survivorship to remove the deceased person from the title, and formally record the conveyance into sole ownership.
In some states, couples can choose to hold property as tenants by the entirety — which is another form of survivorship right. The key difference is that homeownership as tenants by the entirety is protected against debts of the other spouse.
☛ Can same-sex couples own a home as tenants by the entirety? Yes. Today, a legally married couple, same-sex included, may vest a title as a tenancy by the entirety. The tenancy by the entirety may also be available to domestic partners, depending on the state’s law.
When property is owned with rights of survivorship or as tenants by the entirety, the ownership interest that used to belong to the deceased person now passes to the surviving co-owner. The new sole owner of the home may keep it or sell it with no need for permission from a probate court. Can the new sole owner sell the home if it has a mortgage? Yes, but the debt must be satisfied first. The new sole owner needs a payoff letter from the mortgage servicer before the sale.
When the Property Was Held by Tenants in Common
Some co-owners vest their ownership as tenants in common. These co-owners could be spouses, partners, family members, or friends. Each has their own interest, which they might will to anyone they choose. They may own equal shares of the property; or the deed might specify that the tenants in common hold unequal percentages.
If one of the tenants in common dies (just as if one of the housemates had held title as sole owner), the deceased’s ownership interest does not pass automatically to the other.
So, this is when we do need to turn to the last will and testament of the deceased. The house must go through a probate process, administered by the personal representative of the deceased. This party is called an executor, if named in the will, or an administrator, if appointed in probate court.
The personal representative takes care of paying creditors and distributing what’s left as the will directs. Using an executor’s deed (or administrator’s deed), the personal representative may convey the home to the beneficiary named in the will, once the debts are clear and the court approves the conveyance. The conveyance of the executor’s deed takes the deceased homeowner’s name off the title.
What about the surviving tenant in common, who remains vested with a fractional interest in the home? This surviving co-owner will work with the personal representative to sell that fractional interest, or to acquire the deceased owner’s interest. In some cases, the surviving co-owner is the personal representative of the deceased. And in some cases, children or other beneficiaries named by the deceased co-owner may now be receiving an ownership interest. This means the surviving co-owner might just end up sharing homeownership with a beneficiary they do not know, if they don’t sell out.
The mortgage, if any, remains. If no one pays, a lender can foreclose on the home to recoup costs.
And that brings us to a key point. If the debts can’t be cleared without a house sale, the property may be sold through out of probate to a buyer, in order to satisfy debts.
☛ People who leave no last will are said to have died intestate. In this situation, state law controls the transfer of their assets out of probate. Don’t be an intestate homeowner!
When the Home Exists in a Community Property State
In a community property state, real estate belongs to spouses or domestic partners in equal shares. That might sound like a joint tenancy but there are key differences. If both partners sign a deed to record their home as community property, each then holds a transferable interest. Should they divorce, each one keeps an interest — unless and until one signs a quitclaim deed.
When one of the owners dies, the home goes into probate. undertake a court-supervised probate proceeding to transfer the title into the surviving life partner’s name.
Each owner may will their interest to a third party, but if they haven’t done so, then the surviving co-owner acquires that additional interest as sole and separate ownership.
Under some state laws, there can be community property with rights of survivorship, where the survivor gets the deceased partner’s interest, without a probate process involved. The surviving co-owner may clear the home’s title by recording the community property agreement.
When the Late Co-Owner Deliberately Bypassed Probate
Did the deceased hold property in a valid trust? If so, the interest of the deceased is subject to the terms of the trust, not the probate process.
Another way the deceased might have bypassed probate is by naming a beneficiary, in a state that allows transfer on death deeds.
If this is the case, and there’s a valid, recorded, transfer on death deed, then the county recorder needs a certified copy of the death certificate and a notarized affidavit of death in order to convey the property according to its deceased owner’s wishes. Check with the recorder (or consult state law) to learn what documents and fees may be required. The beneficiary should expect to receive the title and a preliminary change of ownership report (PCOR) form.
As the new owner, the beneficiary must be prepared to take on any debts and taxes connected with the home. Creditors get time to make claims and get paid. Perhaps unsurprisingly, an insurer might delay coverage for a house conveyed this way, so the home may not be able to be listed for an immediate sale.
Pro tip: The beneficiary can seek guidance from the title company before accepting the real estate on whether and how the deceased owner needs to be taken off the title.
No Need to Go It Alone
After a co-owner has died, selling a home can get complicated. Note that each state has its own laws that impacts a situation in case-specific ways
The surviving owner or beneficiary can look to the probate court for helpful guidance. Outside of probate, it’s perfectly normal to need an attorney’s help. Deeds.com cannot provide legal advice. Legal advice can only be obtained by consulting with a lawyer who examines both the facts of the case and the current law that applies to them.
Supporting References
Deeds.com: New Homeowner’s Document Checklist & Storage Plan (Sep. 18, 2020).
Deeds.com: Should You Remove a Deceased Owner From a Real Estate Title? (Sep. 23, 2019).
Photo credits: Tima Miroschnichenko and Karolina Grabowska, via Pexels.