How to Transfer Property Title After a Death

Transferring property after someone is deceased doesn’t have to be difficult. There are 4 common ways a property deed is transferred:

• Through a will
• By a trust
• Transfer-on-death deed
• With title ownership (when an owner dies, the co-owner assumes 100% of the property)
  

Without written instructions on what to do with a property after someone is deceased, the property owner could be contested. In these scenarios, the assets will be divided out in probate court, which is a long, arduous process that nobody enjoys.

This article will help you understand the ins and outs of transferring property when someone is deceased and break down the common terminology you’ll see along the way.

First, let’s start with deeds.

What is a Deed?

A deed refers to a legal document with which the holder can lay claim to ownership of real estate or other assets. The deed is used to transfer asset title to a new owner. 

Real estate transactions see the deed handed over at closing, and a valid deed must have certain elements depending on the jurisdiction. These include: 

• Names of grantor and grantee 
• Legal description of property 
• Affidavit of consideration 
• Warranties 
• Signature requirements 
  

Deeds vary, and as a result, they would feature various warranties of title. Common deeds include: 

• Warranty deed 
• Special warranty deed
• Bargain and sale deed
• Quitclaim deed 
  

In order for a property owner to sell, refinance, or obtain a line of credit on a property, there must be a record of such deed with the local government. The title insurance company or buyer’s attorney usually handles this part of a real estate transaction. 

The document in itself as well as the transfer of title is valid, however, in the event of legal issues, the only way to avoid a delay would be to have related paperwork be on file alongside the register of deeds. 

 The following features are required of a deed: 

• The deed must absolutely state on its face that it is a deed 
• The deed must expressly state that it is awarding or conveying some kind of special rights or privileges to someone
• The execution of the deed must be done by the grantor in solemn form 
• A seal must be affixed to the deed 
• Upon delivery, the grantee must accept the deed for it to be valid 

What is the Difference Between Deed and Title?

A deed and a title chiefly vary in the manner in which they exist. 

A deed is a legal document that clearly states that the holder legally owns property or owns the title, and then intends to transfer both title and property to a new owner. 

A property title on the other hand is an intangible concept with no physical documentation. It refers to theoretical rights that a homeowner holds to a piece of real property. It is the deed that holds a public record showing the property owner’s title. 

The rights that can be accessed via a title may vary on the basis of the deed. Clear title vests absolute ownership rights in the titleholder, however, the title’s validity present in the deed can still be contested based on any of these two factors:

• The format in which the title abstract is outlined in the deed 
• Whether a search title has been undertaken 

How Do People Take Title on a Property?

Homeowners may opt to hold title in several ways, and this may in turn impact how ownership rights can be transferred in the future. Here are the most common ways:

Sole Ownership

Sole ownership sees a single owner to the property title. This holding method commonly applies to single individuals, legally divided Ed individuals, married individuals looking to acquire property separate from their spouse (there may be restrictions based on the jurisdiction). 

Joint Tenancy              

Joint tenancy sees two individuals purchase a property together and hold equal shares in said property. Since joint tenants have equal rights, decisions made about the property must be done unanimously. 

In addition, rights of survivorship may be included here which allows the surviving tenant to assume ownership of all shares upon the passing of the other tenant. 

Tenancy In Common

Co-owners of a home have equal rights in the home to use the property for the duration of their lives. However, they hold title to their share of the property individually and can choose to will away or dispose of their individual rights. 

There is no survivorship option here and no tenant inherits the rights of the other. Rather, ownership becomes vested in the decedent's heirs upon the death of either owner. This is where the difference between joint tenancy and tenancy in common lies. 

Tenancy By The Entirety 

This tenancy type is especially for married couples and regards the couple as a single legal entity with property rights shared and undivided. The right to survivorship applies here, and before one spouse can take any action on property, the other must approve. This tenancy type may be found in all states. 

Community Property

This form of title holding, sometimes known as marital property, implies that spouses acquire property during marriage and have the shares split evenly between them. Either spouse can choose to transfer their ownership share or will it however they want. 

Trust

A living trust sees the trust or title holder maintain ownership rights to real estate property until they die or become incapacitated. This then sees an appointed trustee assume property management and control. 

An irrevocable trust ensures that the terms of the agreement cannot be modified and the titleholder basically transfers their ownership rights into the trust. A revocable living trust permits the tile holder to alter agreement terms when they are still alive and their mind is still sound. 

What Does Probate Mean? 

Probate refers to the legal process that reviews the will to ascertain validity and authenticity. It may also encompass the entire process of administering the estate of a deceased person without a will or a deceased person’s will. 

Following the death of the asset holder, an executor (if the deceased had a will) or administrator (in the absence of a will) is appointed to administer the probate process. It mainly involves a collection of assets to pay off liabilities and then distributing what is left over to beneficiaries. 

The probate court usually reviews findings and is the final ruling on how assets should be divided and distributed amongst the recipients. Probate provides protection especially when the deceased did not leave a will. 

How to Transfer Property When Someone is Deceased 

Transfer of deceased real estate may involve a pretty extensive process depending on how the title was held. Probate might be necessary except for when:

• A living trust was used to leave the property to someone instead of a will
• The deceased filed a transfer-on-death deed naming someone as the recipient 
• The property was owned as joint tenants, tenants by entirety, and community property with right of survivorship 
  

In the event that the deceased held the property in a trust, the most updated deed would indicate that the trustee of the trust had the property transferred to them. 

If a transfer-on-death deed was filed by the deceased, the deed would specify the property’s new owner. There would be the need for some paperwork including filing a death certificate copy and an affidavit with the county’s land records office. 

In the event that a surviving co-owner inherits, while rules may vary from county to county or even state to state, it is general to have the surviving co-owner file a statement detailing that they are the new sole owner. They would also file a death certificate, all in the county’s land records office. 

Should You Transfer Property Using a Trust or Will

Using a trust or will rests on certain factors. For instance, a will might be great for small estates with assets that are easily transferable and simple bequests. 

Similarly, having a trust without a will might result in problems when it comes to assets not covered by the trust which become subject to intestacy laws. In other words, larger estates may be better off using both. 

A trust administration has no waiting period which implies that beneficiaries have easier and speedier access to assets left behind. A trust also provides a firmer control for determining how your assets are distributed more than a will would. 

At the end of the day, your choice of will or trust or both should be determined by the size of your estate, tax considerations, age and capabilities of heirs, as well as bequest complexity. To ensure that everything moves smoothly, it is essential to carry out thorough planning. 

Final Thoughts on Transferring Property from a Deceased Relative

Transferring property is done in various ways and various factors affect how it can be done. The major factor is how the property is owned or ownership type. Beyond this, understanding how the entire process goes is key, and if it gets too much at any point, you can always engage the services of an expert to guide you.