Question: My father died in May of last year and title to the family home was held as "tenants by the entirety" between my mother and father. Is there any reason to clear the title and have it re-issued solely in my mother's name? If so, what documents would my mother need and where are these documents filed?
Answer: Although title automatically transferred to your mother on your father's death, I do recommend that your mother take the extra step and have a deed recorded to reflect your father's death and that the property is now held in your mother's sole name..
There are several ways that property can be owned:
- Sole owner. This is obvious; you own the property in your own name.
- Tenants in common. Here, two or more people own property together. Under a tenant in common arrangement, each owner has a divisible interest in the property. Although most tenant in common ownerships are split equally (i.e. 50-50 ownership), there is no legal requirement that it has to be this way. Often, there are financial or other considerations which dictate a different ownership split -- for example 90- 10, or 75-25.
In a tenant in common ownership, on the death of one owner, his/her percentage ownership is part of the decedent's estate. The property interest does not transfer to the surviving owner. If there is a Will, that portion of the property will be distributed in accordance with the instructions in the Will. If the person dies without a Will (called "intestacy") the laws of the jurisdiction where the person was domiciled will control the distribution.
- Joint tenants. Here the parties jointly own the property. Although some states require language to the effect that the property is held as joint tenants "with right of survivorship", the majority of the States will consider the property as being jointly held even if this magic language is not included in the deed.
Under a joint tenancy arrangement, on the death of one owner, the property will automatically be transferred to the surviving joint tenant. This is called a transfer "by operation of law". Let's look at this example:
A and B own property as "joint tenants with right of survivorship". A dies with a Will which specifically gives A's share of the property to C, his child.
However, since the property is jointly held, B will end up with full ownership. C has no claim to the property.
A joint tenancy ownership can be unilaterally separated by one of the joint tenants. Let's go back to our example. While A is alive, he decides to give his share of the property to C. He prepares a Will to this effect. But he also asks his attorney to prepare a deed, changing title to reflect that A and B hold title as "tenants in common". Although B should be informed -- as a matter of courtesy -- of this transaction, B has no control over what A does with his share of the property. Now, when A dies, his interest will be distributed to his child C, in accordance with the terms of the Will.
- Tenants by the entireties> This is title reserved exclusively for husbands and wives. Although some married couples will hold title as joint tenants with right of survivorship, the more common arrangement is to take title as tenants by the entireties. This means that on the death of one spouse, the surviving spouse automatically (by operation of law) becomes the owner of the entire property.
Title ownership is important in life as well as in death. If, for example, there is a creditor who holds a judgment against one of the joint tenant owners, that creditor can force the sale of the property in order to satisfy the judgment.
Let us assume that the judgment creditor is owed $50,000 by one of the joint tenants, and the jointly held house is worth $300,000, with a $200,000 mortgage. The judgment creditor can get a Court Order requiring that the house be sold. The first mortgage lender will get its $200,000, and the remaining $100,000 will be divided as follows: the judgment creditor will get his $50,000 and the joint tenant who did not owe any money will get the difference.
However, when husband and wife hold title as tenants by the entireties, a judgment creditor of only one of the parties cannot force a sale to satisfy the debt. This can only be done if both husband and wife owe the money.
Thus, the way title is owned can be important -- whether you are living or are dead.
Your mother now owns the property, since it was held as tenants by the entireties. The land records, however, still will show ownership in both names. While it is not critical to have the title placed solely in the name of your mother, it is not an expensive process to update the records, and it may solve problems which could arise in later years.
Your mother will need a certified copy of your father's death certificate. This means that the certificate will have an imprinted Seal from the government office which issues such certificates. She will then have to record a document -- called a "confirmatory deed" -- in the office of the Recorder of Deeds in the jurisdiction where the property is located.
There should be no recordation or transfer tax, and the filing fee should be nominal, perhaps $20 or $30. Some local jurisdictions may require some additional documentation -- such as an affidavit of exemption from tax. Why should your mother make sure that title is in her name? Peace of mind is perhaps the most important factor. Additionally, many years later, you may not have your father's death certificate and there may be delays in attempting to locate one quickly, should the need arise to sell or refinance the property.
For these reasons and others, the question of how best to hold property should be carefully reviewed with legal counsel.
For more articles by Benny Kass, please press here .
Copyright 2001 Benny Kass. Posted by Realty Times with permission.