There are many ways that someone can own real property and those are determined by the title to the real estate. Not knowing how your home is titled and not understanding the real property laws and how they work with probate and estate administration can cause significant damage.
A home can be owned (1) individually; (2) jointly; (3) in a business, or (4) in a trust. Three of the four mentioned are most likely required to go through the probate process even if you have a will. Most people prefer to avoid probate when possible for the following reasons:
1) It takes several months (often longer) to go through the complexities of probate; and
2) It is often more expensive due to court costs, publication requirements and attorney’s fees.
All assets held by an individual go through probate. This means the real estate is titled only in the individual’s name. Jointly held property may avoid probate if the deed contains language referencing ‘rights of survivorship’. If that language is not included in the deed, then the joint property will be considered as ‘tenants in common’ which means the property will need to go through probate.
Keep in mind that once the first joint owner dies even if the deed includes the proper survivorship language, the property is then held by an individual again and will be subject to probate once the second owner dies. The second owner will need to place the property in trust in order to avoid probate.
Businesses – which are often Limited Liability Companies (LLCs), owning real property subject that property to probate when a business owner dies. The only ways to avoid this are (1) having a solid business succession plan – a written legal document – detailing how the business is to be designated at the death of the owner, or (2) place the business in a trust.
For more information on determining whether your deeds to real property, especially your home, are titled correctly to reflect your estate planning goals, contact Stouffer Legal at 443-470-3599 in the Greater Baltimore area.
