Keeping the Family Home Out of Probate

Probate is the process that occurs after a person has died that basically administers their estate through court proceedings. Their property and debts are assessed, taxes paid accordingly, and assets are distributed according to the will. The home is one such piece of property that will be considered in a probate court. Depending on outstanding debts and the determination of the court, the family home may be placed in the hands of the court and sold to pay off debts.

Keep the Family Home from Probate

The best way to ensure that the family home remains with the family is to keep the home out of probate court. There are a few different ways to ensure that the home is not threatened in the probate process.

A Living Trust

A living trust is an alternative to a traditional will that leaves the probate court out of the process. All property will be placed in trusts and managed by a trustee on behalf of all beneficiaries of the trust. The trust assumes ownership of all property as opposed to individuals.

The living trust will also avoid probate fees. Probate fees are taken from the total estate of the deceased before debts were paid off.

Joint Tenancy

Joint tenancy is an option that allows joint ownership of individual properties. If a property is co-owned, then the death of one party does not cancel out the ownership of the other, allowing the property to automatically transfer outside of court.

Transfer-On-Death Deed

A transfer-on-death (TOD) deed works by naming a beneficiary to a person's accounts, property, investments, and retirement plans. Since naming a beneficiary acts as a contract, the probate court is unable to challenge this kind of inheritance and property is distributed directly to the individual named.

A key component of a TOD deed is the stipulation that no ownership of the property is assumed until all owners of the property are dead. It also allows the beneficiary to remain unaware that their name is on the TOD deed. Multiple beneficiaries can be added to the deed in the order the property should be handed down.

This document must be recorded with a county land records office to be valid. Upon death, the property is transferred, along with any mortgage or debt attached.

A home can not only be the most financially valuable asset a person owns, but it can also hold deep emotional value. Talking with a lawyer about options to protect the family home can provide relief for the family in an already emotional time.

Categories: Probate