Couples going in together to purchase a home: a common and important milestone in any relationship. Unfortunately, the wording for the purchase of that home can have unintended consequences, especially when one in the couple dies.
Most couples buy a home believing that the home will simply pass on to the surviving person in the event of death. This is not always true. In Georgia, an automatic transfer at death will only happen if the purchasing deed (often a warranty deed) states that both people are taking the property as “Joint Tenants with Rights of Survivorship.” With this language in the deed, upon the death of one person, the property will transfer to the survivor, and it will not be considered a probate asset. This allows for a quick disposition of a property in the event that the survivor needs to sell or take on a mortgage for some needed funds. Additionally, because having a property titled in this manner helps avoid probate administration, that also means the asset is protected from potential creditors of the deceased (not excluding any mortgages associated with the actual property, though).
Problems may arise if the home is simply titled in the names of the couple without the “rights of survivorship” language. As mentioned, such property might be subject to claims by creditors of the deceased. Also, even if there are no creditors, a surviving partner will need to go through the formal hassle and expense of administering the deceased’s estate through a probate court. Petitions will need to be drafted and filed, as well as an executor’s deed in order to properly transfer title. This can take up a lot of time and money for something that could be avoided through some simple estate planning. Additionally, if the deceased passes without a will, the deceased’s ownership interest in the property could potentially be distributed to a surviving spouse (assuming if the property is not titled to a married couple) or surviving children. This would be a negative and unintended consequence if your plans are that the property go to the other surviving owner upon your death.
Taking time to speak with an estate planning attorney about your assets and planning needs can help prevent unintended consequences such as these. Through proper drafting of wills and deed paperwork, an attorney can help you avoid these pitfalls that are all too common. Please contact the experienced attorneys of Boyce Larsen today to schedule a consultation to learn more.