Your Home, Your Deed & Your Estate
Planning Matters
What Happens When a Spouse Dies?
Estate planning can feel complicated, especially when a home is involved. One of the biggest sources of confusion is understanding how the deed, a will, a trust and probate work together.
A good place to start is with one simple question:
How is your home titled today?
When a Married Couple Owns the Home
In North Carolina, when a married couple owns real estate together, the property is commonly titled as tenants by the entirety. With this form of ownership, when one spouse dies, the surviving spouse generally continues as the sole owner without the deceased spouse's interest passing through probate.
This is an important distinction: a will does not necessarily determine what happens to every asset. How an asset is legally owned—and how it is titled—can determine what happens first.
This is also why reviewing the deed as part of an overall estate plan is important. A will, trust and property deed should work together to accomplish what the homeowners intend.
What About Joint Ownership With Someone Else?
Another form of ownership in North Carolina is Joint Tenancy with Right of Survivorship. This can be important when two or more people own a property together, including family members who are not married to each other.
With right of survivorship, when one owner dies, that person's ownership interest generally passes to the surviving owner or owners rather than through the deceased person's estate.
However, simply having multiple names on a deed does not necessarily mean there is a right of survivorship. The way the deed is written matters.
This is why it's important to understand not only who is on the deed, but how ownership is titled.
What If There's a Trust?
A trust adds another layer.
If the home has actually been transferred into a trust, the trust document and the way the property is titled become important in determining what happens after a death.
This is also where terminology can get confusing.
A trustee manages property held in a trust. An executor (sometimes called a personal representative) administers someone's estate after death. The same person could potentially serve in both roles, but the jobs are different.
Simply being named an executor or trustee does not by itself make that person an owner of the home.
What If Someone Else Is Also on the Deed?
This is where it's especially important to understand the deed.
For example, suppose a married couple owns a home and an adult child is also listed on the deed. That child may also be named executor of a parent's estate or successor trustee of a trust.
Does the child own the home when a parent dies? Does the surviving spouse own it? Does some portion have to go through the estate?
The answer depends on exactly how ownership was established.
Being "on the deed" doesn't tell the whole story. The type of ownership and any survivorship provisions can determine what happens to each person's interest when an owner dies.
When Does Probate Come Into Play?
Probate is the legal process used to administer certain assets belonging to someone who has died.
Some assets can pass outside of probate because of the way they are titled or because another legal arrangement determines who receives them. Other assets may become part of the estate and need to go through the estate-administration process.
That's why it helps to think of these as separate questions:
Who owns the property?
Look at the deed.
Is the property owned by a trust?
Look at the trust and how title was transferred.
Does any part of the property belong to the deceased person's estate?
That's where the will, executor and probate process may become relevant.
And What About the Mortgage?
A mortgage doesn't simply disappear when an owner dies.
The ownership of the property and the loan secured by the property are related, but they are not the same thing. A surviving spouse, heir or trustee may need to work with the mortgage servicer while the ownership and estate matters are being handled.
A Good Reason to Review Things Now
You don't need to become an expert in estate law. But it is worthwhile to know:
Whose names are currently on your deed
How ownership is listed
Whether your home has been transferred into a trust
Who is named as trustee or successor trustee
Who is named as executor in your will
Whether your deed, will and trust accomplish what you intend
Estate planning doesn't have to be complicated, but your deed, will, trust and mortgage should work together rather than be considered separately.
An estate-planning attorney can review your specific situation and determine whether your current ownership and estate documents accomplish what you want them to. Estate and property laws vary by state. This article discusses general concepts applicable to North Carolina property owners.
This information is provided for general educational purposes and is not intended as legal or estate-planning advice.
*We know some great professionals in this area of expertise; please let us know if you would like us to connect you with someone.
