When two parties buy a house together, they probably are not considering who will get it if one passes away first. And if other family members have been added to the deed for various reasons over the years, the issue of deed transfer becomes extremely complicated when one of the original owners dies.
States vary on what they require for deed transfer. Estate planning is the best way to make sure your wishes are carried out, and to ensure the property will transfer to the correct person if you die first.
Meet with an estate planning attorney to determine the best way to transfer property after a death occurs, whether you are preplanning, or someone has already died. Each state has different laws and requirements; avoid any unnecessary legal issues and get assistance on the best way to transfer the property deed. To find one, visit the American Academy of Estate Planning Attorneys website.
Place a deed in "joint tenancy," in which both parties--usually a husband and wife--have equal shares in the ownership. Also called "the Right of Survivorship," upon the death of one party, the deed automatically transfers to the other party once a death certificate is produced.
Verify whether your state allows or requires a Transfer on Death Deed. These allow the deceased to name who the deed will transfer to, keeping the actual house deed free of encumbrances from children and grandchildren, even if they are listed on the deed itself. If one has been completed, the individual to whom the house was left produces a death certificate and signs an affidavit with the county real estate recorder, and the property is transferred.
Set up a survivorship deed, a type of warranty deed with survivorship rights. (A warranty deed guarantees there are no liens or encumbrances against the property.) Similar to joint tenancy, if one of the owners dies, the property automatically transfers to the surviving owner. A probate court is not involved until the last survivor dies. At that time, the family must then have a probate court determine how the property will be divided, depending on how a will is worded.
A joint tenancy claim takes precedence over any creditor's interest in the property.
It is always best to spell out your wishes in a will, to protect a deed from unwanted or unfounded claims by other family members.