How Real Property passes at the owner’s death
For most people, their home is the largest asset in their estate. The way a principle residence passes after death depends on how it is titled during the owner’s lifetime. The following are several ways that real property passes at death:
- If you are married and own the property as tenancy by the entirety with your spouse, the property passes to your spouse automatically at your death.
- For unmarried couples, a similar type of home ownership is joint tenancy with rights of survivorship. If one partner dies, the other partner automatically inherits the house.
- A third type of joint home ownership is tenancy in common. Both parties own a share of the property. If one party dies, the share of the deceased owner passes under that person’s Will or goes to the deceased person’s heirs if he dies without a Will.
- A fourth type of home ownership is ownership by a trust. If title to a residence has been transferred to a trust during the owner’s life, the trust owns the real property and the terms of the trust determine what happens at the trust grantor’s death.
- If you are the sole owner of your real property, your Will states who inherits your real property. If you die without a Will, the property passes to your closest heirs as determined by Tennessee law.
If You Die Without a Will
If you die without a Will, you are intestate. State law dictates who receives the estate of those who die intestate. In Tennessee, the estate is divided among the surviving spouse and children (if any). If you have no spouse or children who survive you, the estate goes to your next closest relatives (parents, siblings, nieces, nephews, cousins, etc.) as determined by the Tennessee intestacy law. In some cases, an extensive heir search is required to locate distant relations who inherit the property under state law.
If You Die With a Will, use a Power of Sale
Under Tennessee law, title to real property vests immediately at death in the new owner. That person may be the new owner by means of joint title, or inheritance by Will or by intestacy.
To make it easier to sell real property after the owner’s death, it is helpful to include a “power of sale” in the Will. This is a statement that your executor has the power to sell the property and treat it like any other asset in the probate estate. If you die intestate or execute a Will with no “power of sale”, your personal representative has no authority to sell the property. In some cases, multiple new owners in whom the property has automatically vested can find it hard to agree over how to market, price and repair a home for sale. If the deceased owner’s debts and expenses exceed the cash in the probate estate, the personal representative can ask the Probate Court to order the real property back into the probate estate and give the personal representative authority to sell the property and use the proceeds to pay creditors and estate administration expenses.
Probate for Muniment of Title
If real property is the sole asset of an estate, the Will can be filed in Probate Court with a petition for muniment of title only. This is a type of probate used when there are no outstanding debts and no need for a full probate administration. This type of probate establishes the transfer of title to the new owner named in the Will. This probate process opens and closes the estate in one day.
Affidavit Of Heirship
If real property is the sole asset of an estate, and the owner dies without a Will, an Affidavit of Heirship can be filed with the Register of Deeds. This Affidavit, usually prepared by an attorney and accompanied by the deceased owner’s death certificate, states the facts which allow an interested third party to identify the heirs who inherited the property by intestacy.
Real Estate and your Will: Vacation homes
When vacation property is left to multiple new owners, it can lead to conflict. If one new owner needs or would rather have the money than the property, that person can force the sale of the property unless the other owners buy them out. You can avert this problem by talking to your children or other beneficiaries to find out whether they want the property before you execute your Will. Those who do not want the property or cannot afford the expenses of ownership can receive other assets instead. Don’t assume that all of your children are equally interested in ownership or equally ready to assume the expenses of ownership. Like many things in estate planning, communication is the best way to avoid future problems.
Talk to an Attorney
You and your heirs will have peace of mind if you hire an estate attorney to handle the details of your estate planning. If you haven’t taken care of this, don’t wait. Do it today.