Avoiding Probate for Real Estate Through Joint Ownership
One common strategy to bypass the probate process for real estate after the owner’s death is to add children or other individuals as joint owners with rights of survivorship. When a joint owner with survivorship rights passes away, the surviving owners automatically inherit the deceased owner’s share of the property.
For instance, if there are three joint owners with survivorship rights, and one passes away, the two remaining owners will each own 50% of the property, without the need for probate. When the second owner dies, the surviving owner will own 100% of the property, again without any probate involvement.
To set up joint ownership with survivorship rights, the current property owner must prepare a new deed that transfers the property from themselves (as the original owner) to themselves and the individuals they wish to co-own the property with. The deed should clearly state that the recipients are joint owners with survivorship rights, using language compliant with state laws. The signed deed must then be recorded in the appropriate public land records.
Although some people believe they can simply download a deed template online or from a book, complete it, and record it themselves, deeds are legal documents subject to specific state laws. In many states, property will not pass free of probate unless the deed contains particular legal language. Without proper wording, the transfer could be delayed or challenged.
What Happens if There’s an Issue with the Deed?
If a deed is defective or invalid, and the issue is identified before the owner passes away, it may be possible to correct the deed by preparing and recording a corrective deed with the appropriate public land records. This should always be done with the help of an attorney to ensure the correction is legally sound and doesn’t cause further complications.
However, if a problem with the deed is discovered after the owner’s death, a corrective deed cannot be signed by the deceased. As a result, the property may have to go through probate to resolve the title issues. Probate can be time-consuming, costly, and prevent the property from being sold until the title issues are cleared. Worse still, the property could be inherited by someone the owner did not intend to inherit it, either due to errors in the deed or an unintended consequence of the way the deed was written.
What Should You Do?
If you’re considering adding your children or other beneficiaries to your deed to avoid probate, it’s important to carefully consider your options. While it may seem like a cost-saving measure to use an online form or a template from a book, deeds are legal documents with precise requirements that vary by state. What works in one state may not be valid in another.
To ensure that your real estate passes to your intended heirs without probate, it’s best to consult with an attorney who is knowledgeable about your state’s real estate and probate laws. An attorney can help draft a valid deed that fulfills your intentions and ensures the property transfers as you intend, avoiding probate.
Additionally, adding people to your deed may not always be the best choice. There are potential tax implications, risks of unintended gifts, and other legal consequences to consider. If your primary goal is to avoid probate, an experienced estate planning attorney can explore various strategies that best align with your wishes, helping to ensure your estate is handled smoothly and according to your desires.
For personalized guidance on how to avoid probate for your loved ones, feel free to contact us.