Imagine your estate plan is created and ready to go. You are protecting your home,…
If the notion of knowing who owns your home sounds crazy, then consider this scenario:
Tom and Mary bought their home in 1964, two years after they were married. Fifty years later, Tom has passed away and Mary wants to sell the house in order to pay for an assisted living facility. Since all of Tom’s assets were believed to be held jointly with Mary, his Last Will and Testament was never probated and no fiduciary was ever appointed for his estate. Mary believed that she and her husband purchased the home as tenants by the entirety, so once Tom passed away she owned the home.
Unfortunately, after 50 years of living in the house and raising a family the deed could not be located among Tom’s documents. But since Mary was certain that the house was hers and she needed the money, she decided to sell the property. She entered into a contract of sale for the home only to find out in the title report that the house was actually purchased by her and Tom as “tenants in common.” This means that when Tom passed away 50% of the house went to his estate and passes pursuant to the terms of his Will and not to Mary outright.
Now, in order to move forward with the sale, Mary has to amend the contract of sale according to the true ownership, have Tom’s Will probated, have an executor appointed for the estate, and all in a hurry. These additional tasks, can be extremely costly and time consuming and may delay or even terminate the sale of the house. Furthermore, if Mary is able to complete these tasks and have an Executor appointed to close on the property, half of the proceeds from the sale will go to Tom’s estate and ultimately be distributed pursuant to the terms of his Will.
There are many different ways to own real property. You can own it individually, as joint owners with rights of survivorship, as tenants in common, as tenants by the entirety, as life estate holders, or as remainder interest holders. Knowing the type of ownership you have of your home is essential before deciding to put the house on the market. The easiest way to understand how your home is owned is to read the most recent deed that was recorded with the county clerk’s office.
Do not take for granted that you are the true owner of your real property. Knowing the true ownership of your home may help you avoid a huge headache and save you thousands of dollars.
By Eric J. Einhart – Guest Blogger