What Happens to a House When Its Owner Passes Away?
There are a few inevitabilities in life. Death is one of them. When a homeowner passes away, one of the questions at the forefront of many people’s minds is what will happen to the house. As it turns out, a few different things could happen to it. The final result depends on what preparation, if any, the owner did before passing away, their will, and the state of the estate’s finances.
It Avoids Probate
Lots of houses go into probate when their owners pass away. Some manage to avoid it altogether though. There are a few ways this might happen. If there was another person’s name on the deed to the house, it could simply transfer through joint ownership or community property laws. A transfer-on-death deed would also pass ownership on to another person after the former owner passes. The other way to avoid the house going through probate is to place it in a living trust. In this arrangement, the trust is the owner, allowing it to avoid probate.
It Is Inherited
If the house goes into probate, it may be inherited by a beneficiary (or multiple beneficiaries). This is usually determined by the previous owner’s will, provided they left one. If they didn’t, it will be up to the probate court to determine who inherits the house using intestate laws. Intestate refers to someone who died without making a will.
It Is Sold
In some cases, the house will need to be sold. This may happen to settle estate debts (which must be done before assets and belongings can be distributed to beneficiaries) or to liquidate the asset so the proceeds can be inherited. In some cases, the house’s inheritor may not be in a position to retain ownership of the property. They may decide to sell it instead. The probate court may supervise the sale, depending on when it happens in the probate process.
Figuring out what will happen to a house when its owner passes away isn’t always as straightforward as some might wish. There are a lot of factors at play that influence the outcome. Whether you’re the executor of the estate or a beneficiary, learning about the options clears up a lot of the confusion that might otherwise surround settling an estate.
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