Title Tip: What Happens When a Person Dies While Owning Real Estate?

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By Lydia Blair
Special Contributor

When a person dies holding real estate in their name, the property doesn’t transfer to heaven. Some people think the situation can become quite the opposite. The process can be agonizing.

The owner who has died obviously can’t sell their home after they’re dead. The property cannot be sold until their name has been removed from the title. That can be a long and often complicated process. Often the heirs aren’t prepared to deal with the months of upkeep expenses, taxes, mortgage payments, etc. that come with the property.

There are usually two situations when selling an estate property. The owner died either with or without a will to designate their wishes.

If the owner died with a will, the heirs can take immediate action. The will can be entered into probate proceedings with the county court within four years of death. A last will and testament does not automatically cause the real estate to transfer. It is just a statement of the deceased’s intent. The property must legally transfer to another person(s) or entity if it is to be sold.

An Heirship Affidavit may often be used if the will has left the property only to the direct descendants of the deceased. Sometimes, this may be a less expensive and faster process than a probate proceeding.

An Affidavit of Heirship is also required if the deceased died without a will.

The question of who has rights to the property and in what percentages must be solved. Until ownership is determined, the property is essentially unsellable. A title company will not insure the title until heirship is resolved.

Individual title companies and their underwriters have different requirements to accept an Affidavit of Heirship to transfer title. Some of the requirements to use an Affidavit of Heirship may include:

  • Two or three disinterested parties with personal, first-hand knowledge of the family history must complete and sign the affidavit. They should know the details of all births, deaths, marriages, etc. They must disclose the nature of their relationship with the deceased and how long they’ve known them. Some companies require them to have an association with the deceased for at least 10 years.
  •  None of the people completing and signing the affidavit can be an heir of the deceased or receive any benefit of any kind from signing the affidavit.
  • The deceased must have died at least six months previous to the execution of the affidavit.
  • A death certificate must be furnished to the title company.
  • All adult heirs who are taking title may be required to sign other affidavits as well.

Many title companies have additional or different requirements and these may change over time. An attorney should be consulted to ensure this affidavit is done correctly. The details of the Affidavit of Heirship should be confirmed by the title company prior to being completed and signed. The objective is to declare a record of the identity and interests of all heirs.

Once the heir(s) are established, the process of filing the affidavit, transferring the deed, and recording in county records may happen so that the property can be sold or transferred.

The topic of death is a sensitive one and requires a combination of compassion and practicality to sell the property. Heirs may be disappointed when they discover how lengthy and complicated the process can be. Sometimes beneficiaries are estranged from other family members or have moved away. They may be uncooperative or just hard to locate. Often issues between family members can get messy when it comes to money and emotions. Title companies must deal with the challenges of helping transfer a property while establishing a clean chain of title and ensuring the property passes legally through the rightful heirs.

We all know that you can’t take it with you when you die. Leaving a will can make it easier to transfer what you leave behind.

The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.

Lydia Blair (formerly Lydia Player) was a successful Realtor for 10 years before jumping to the title side of the business in 2015. Prior to selling real estate, she bought, remodeled and sold homes (before house flipping was an expression). She’s been through the real estate closing process countless times as either a buyer, a seller, a Realtor, and an Escrow Officer. As an Escrow Officer for Allegiance Title at Preston Center, she likes solving problems and cutting through red tape. The most fun part of her job is handing people keys or a check.

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