Transferring Real Estate After Death

When a family member dies, there's certainly a lot to sort out. If the estate you're dealing with contains real estate, such as a house, it could easily be the most valuable asset in the estate—and surviving family members are going to be extremely interested in what happens to it. Let's look at the process for the transfer of real property (like a home) after a death, and how to transfer a deed to a new owner.

What Happens to Real Estate When the Owner Dies?

After the owner of a home dies, what happens to that property depends on a number of factors. You must find out whether the owner did any estate planning around the real estate, such as making a will, living trust, or transfer-on-death deed. If the owner co-owned the home, the specific way they co-owned the home (discussed below) is important. These factors will determine whether the real estate needs to go through probate, or whether there's an easier, faster way to transfer the home to its new owners.

Can a House Stay Under a Deceased Person's Name?

You might be wondering whether you can just leave the house under your loved one's name after they pass away—and not have to deal with paperwork and filings. But it's always best to go through the process of transferring title to the property in the ways set out below. If you're not listed at all on the deed, you're headed for problems further down the line. (For example, you won't be able to sell the house.) Even if you were married to the deceased person and co-owned the home together, you should still take the steps to transfer title to yourself as sole owner. Especially with such a significant asset as a home, you want the title to reflect the current situation, which can impact taxes, utilities, and the next inheritors of the home after you pass away.

Will the Home of Your Deceased Relative Go Through Probate?

You might be wondering whether the real estate will be tied up in probate after your loved one dies. (Learn more about the probate process, in which a probate court oversees the distribution of a deceased person's property.) The real estate will need to go through probate before it is transferred to the new owner or owners unless:

• the deceased person used a living trust to leave the real estate to someone
• the deceased person completed and filed a transfer-on-death deed that designates someone to receive the property after death, or
• the deceased person co-owned the real estate in one of a few ways.

To find out if the deceased person co-owned the real estate, first find the deed that shows the deceased person owned the property. The deed, which may be titled a quitclaim deed, grant deed, joint tenancy deed, or warranty deed, should state how the deceased person, and any co-owners, held title to the property. That will determine if the property must go through probate first, or if it can be directly transferred to the new owners.

Below are a few possibilities for how the deceased might have owned the property.

Sole Ownership: Probate Required

If the property was owned in the deceased person's name alone (and there is no living trust or transfer-on-death deed, as discussed above), the property will probably have to go through the probate process to be transferred to whomever inherits it. Who inherits the property is determined by the person's will, and if there is no will, by state law.

Co-Owned as Joint Tenants: No Probate Required

If the deed says title was held in "joint tenancy with right of survivorship," and the co-owner is still alive, then the surviving co-owner is now automatically the sole owner of the property. No probate will be necessary to transfer ownership, though the co-owner will need to complete some paperwork to make it clear that the property is now solely owned. (See "How to Transfer Real Estate After Death," below.)

Co-Owned as Tenants by the Entirety: No Probate Required

If the deceased person owned the property with his or her spouse, then in certain states it could have been held in tenancy by the entirety (also called "tenancy by the entireties"). As with joint tenancy, the surviving spouse is now the sole owner. No probate proceeding is necessary for the survivor to take ownership, only some paperwork.

Co-Owned as Community Property: Probate Required

In community property states, spouses (and registered domestic partners, in some states) can hold property in community property, meaning that it's owned by the couple together; during their lifetimes, each spouse owns half of the community property. Each spouse is free to write a will that leaves that spouse's half of the property whomever they choose, but if there's no will, the surviving spouse inherits the property. Probate is usually necessary.

Community property states include Arizona, California, Idaho, Louisiana, New Mexico, Nevada, Texas, Washington, and Wisconsin. (Alaska also allows spouses to designate real estate as community property, and Kentucky, South Dakota, and Tennessee allow spouses to create special community property trusts.)

Co-Owned as Community Property with Right of Survivorship: No Probate Required

Some community property states (Arizona, California, Nevada, and Wisconsin) also offer the option of holding property as community property "with right of survivorship." When the first spouse dies, it gives the survivor automatic ownership of the property. No probate is necessary.

Co-Owned as Tenancy in Common: Probate Required

Co-owners sometimes own real estate as tenants in common; you might come across this form of ownership if the co-owners inherited the real estate—for example, they were siblings who inherited a house from their parents—or were in business together. Each co-owner can name a beneficiary in his or her will; if there's no will, the deceased co-owner's interest in the property passes under state law to the closest relatives. Probate will be necessary to transfer the interest in the property.

How to Transfer Real Estate After Death

Transferring Real Estate Held in a Trust

If the deceased person held the property in a trust, the most recent deed should show that the property was transferred to the trustee of the trust. For example, it might list the owners as "Tomas Penko and Marla Penko, trustees of the Penko Family Trust dated March 3, 2015." The trust will state who is the beneficiary (new owner) of the property. The trustee of the trust will need to make a new deed that transfers the property from the trustee of the trust to the new owner. (See Transferring Real Estate Held in a Trust for more.)

Transferring a Home According to a Transfer-on-Death Deed

If the deceased person filed a transfer-on-death deed, that deed will specify the new owner of the property. The new owner will usually have to complete a little paperwork, often by filing an affidavit (a simple sworn statement) and a copy of the death certificate with the county's land records office. (See How the New Owner Claims Transfer-on-Death Real Estate.)

Transferring Real Estate to a Surviving Co-Owner

If the deceased person co-owned the property with the right of survivorship—that is, as joint tenants, tenants by the entirety, or community property with right of survivorship—the surviving co-owner will own the property outright. The surviving co-owner will still need to take a few steps to get the property listed in their name alone. Although the rules will vary for each state or even county, generally, the surviving co-owner will need to file an affidavit and a death certificate in the land records office of the county where the real estate is located. (See Transferring Joint Tenancy Real Estate After a Death.)

Transferring Real Estate According to a Will

If property is distributed according to the terms of a will, the property goes through the probate process. At the end of probate—which can take several months to over a year—the beneficiary will become the owner of the real estate.

Transferring Property After Death Without a Will

If there's no will, the real estate will still need to go through probate (unless one of the exceptions listed above exists, such as the real estate was co-owned a certain way). During the probate process, the court will determine who inherits the real estate. It will use state laws called laws of intestate succession that establish an order of priority for heirs. For example, if there's a surviving spouse, that spouse usually inherits the property. Next on the priority list is usually children. But it depends on state law.

When probate is complete, the person who was determined to inherit the property becomes the new owner.

Taking Care of Real Estate Until It's Transferred to New Owners

It can take some time before the real estate is officially transferred to a new owner. If probate is involved, the real estate might not be transferred for several months or even more than a year. During that time, the executor or representative of the estate needs to take care of the home. This includes paying the mortgage and taxes (from the estate assets) and keeping the place maintained until it can be formally transferred to its new owner or owners. (See The Executor's Responsibility to Manage Estate Property for more.)

You may also need to get the property appraised, which means getting a professional valuation of what the property is worth. This might be required if the estate goes through probate, or to determine whether the estate qualifies for simplified probate procedures. Beneficiaries might also want to know what the real estate is worth, or may need the value for tax purposes.