What Do I Do if My Parents Died & the House Title Was Not Changed?
When your parents die, one of the last things you want to be dwelling on is how their home will be transferred. Nevertheless, when there is no other name on the deed to their home, it may seem like a substantial problem. Depending on a couple of considerations, this problem is not typically as bad as it may seem.
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No Will
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When a person dies without a will, it is said that he dies "intestate." If your parents' home was only in their names when they died and they had no will or trust to guide governmental officials as to whom the property now belongs, the matter is brought to a county probate court and an impartial representative is appointed to decide the closest living heir. State statute will typically be the guide for determining who will receive the property.
Will
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If your parents had a will, they died "testate." While there will still be a probate procedure in these cases, the will, assuming it is legally constructed, will decide all estate matters for the court. If it is not current, as when beneficiaries have passed away since it was written, a probate court will use it as a guide, if possible, and will also consider state testate statutes to transfer the property. However, a surviving spouse is given priority over other people regardless of what a will says.
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Trust
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When an estate establishes a trust the trust can completely guide the transfer of property without a probate court proceeding. This is the case in all 50 states. Even if there are items not included in the living trust that are subject to probate court, a living trust shields what is in it, including real estate, from being distributed by state statute. It also supersedes a will, if it conflicts, in real estate or any other estate matter.
Other Considerations
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If there is a will, anyone attempting to dispute its validity will have a predetermined statute of limitations, often a matter of several months, during which to issue a "will dispute." This sometimes happens when someone produces a second will, containing different information. The probate court will decide which will is valid and what the intent of your parents was to determine who will receive the real estate and other property. If your parents lived in the home before passing and you receive it as part of a trust or a probate decision, you or the property estate will not be required to pay capital gains taxes unless the total value of the estate exceeds $5 million, the capital gains exemption limit as of 2011, regardless of what your parents paid for the home.
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References
- Colorado State University: How Property Passes at Death; Celeste Holder Kling; May 2008
- Living Trust Network: How Property is Distributed Upon Death
- EPC Seattle: Legal Matters: How Property Passes At Death
- Smart Money: Passing Your Home to Heirs; January 2011
- Gary D. Rappard: Estate Administration Schedule - Missouri
Resources
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