When a person dies, their loved ones have to take care of their estate. The estate consists of any assets owned by the decedent directly. The estate technically owns that property until the completion of estate administration and probate proceedings.
At that point, the personal representative overseeing estate administration distributes what remains in the estate to beneficiaries or heirs. The estate plan of the deceased individual has a major influence on the probate process. Frequently, testators drafting wills and thinking about what their loved ones may inherit establish plans with the intention of keeping assets out of probate court. Oftentimes, they focus their efforts on their most valuable resources. For many people, the home where they live is the asset that requires the most attention and that is the most vulnerable after their passing.
How can people keep their primary residence out of probate court after they die?
By taking on a co-owner
When a person acquires real property, their name appears on the title records for the property. Those title records protect their rights and also the rights of their heirs after they die. It is possible to hold title in a way that allows one party’s interest in the property to pass directly to someone else who lives with them. Testators cohabitating with another person can hold title as joint tenants with rights of survivorship. When either tenant dies, the other party inherits their interest in the home.
By transferring it to a trust
Maybe the person who owns the home wants a child with special needs to have access to the property after they pass. Perhaps they want their children to share access to the home while a new spouse retains the right to live there until they die or remarry. Trusts are an effective way to control what happens to real property after the current owner passes. The trust can manage the property and can grant specific beneficiaries access to the property.
For many people, holding real property in a trust is a viable solution when adjusting ownership ahead of time isn’t practical. In some jurisdictions, testators have the option of drafting a transfer-on-death deed to allow for a specific beneficiary to assume control over the property after their passing. Unfortunately, Maryland does not allow for transfer-on-death deeds.
For many people, trusts and ownership changes are the most effective means of keeping real property out of probate after the owner dies. Reviewing personal holdings and legacy goals with a skilled legal team can help people establish estate plans that work for their unique circumstances.
