If you co-own your home, it is vitally important to know exactly HOW that ownership is held. Why? Most people think that if they own property together and one of them dies, the deceased person’s ownership interest automatically goes to the survivor. Sadly, it’s not that simple. In order for title to pass automatically to the survivor, the ownership must be held as Joint Tenants with Rights of Survivorship (JTWROS). Those are your magic words.
Who reads the deed at their closing? Who reviews them even after the closing? Even if you did, you probably didn’t know to inspect whether the title was being held as JTWROS. If that critical language, those six “magic words,” are not there in the deed itself, the ownership of that property in Georgia is considered to be Tenancy in Common (TIC). The problem with Tenancy in Common is that when one party dies, their interest doesn’t pass to the surviving owner. Instead, each owner owns a one half undivided interest in the property and the ownership of the half belonging to the person who died passes to his or her heirs, typically their spouse and children. Even then, the surviving property owner has to wait for the estate to be probated before they can exercise their ownership rights over the other half. In other words, they can’t sell, refinance, or even take out an equity line secured by the property until after probate, which usually takes a minimum of four-to-six months. This process becomes even more involved when an heir is under eighteen (18) years of age and is not legally competent to sign a deed. Have a seat and take a number. It's going to be a while.
As an attorney who handles probate and estate planning matters throughout Georgia, I am frequently hired by surviving family members trying to sort things out matters after their loved one dies. Far too often, they find out, too late, that they didn’t have JTWROS and they face a long, complicated procedure to get clear title to a house they THOUGHT they owned. I urge you not to find out too late. Find out now and be sure.
Here’s an example of why: I had a client whose father died in 2005. Mom and Dad’s house was owned jointly by Mom and Dad. When Dad died, no probate was done, because Mom and the kids thought the title passed automatically to Mom as to co-owner. When Mom died several years later though, we had to open an additional probate to transfer Dad’s half of the property to Mom’s estate so their son, the Executor, could sell it. There is that dreaded, and completely unnecessary, double whammy. If Mom and Dad had owned the house as “Joint Tenants with Rights of Survivorship,” Dad’s ownership would have ended on his death and full title to the house would have passed to Mom. The second probate, that double whammy, filed years after Dad’s death, could have been avoided.
So here are important Steps to Take After the Death of a Joint Owner
1. Review the Deed Showing Joint Ownership to verify rights of survivorship language is present,
2. Obtain a certified copy of the Death Certificate of the Decedent,
3. Review Mortgage Documents,
4. File an "Affidavit of Ownership,"
5. Re-Apply for any Exemptions which You Were Previously Receiving or New Exemptions to Which You are Entitled.
Closing on your house was complicated enough. Try to avoid this common pitfall with a little review of your deed before the crisis comes. It is less worrisome, and less expensive, to avoid a crisis rather than wrangle with it.
Call me with any questions.