Real estate transactions can be complicated, especially when you inherit property after someone passes away. Whether you’ve unexpectedly come into a property or are dealing with the loss of a loved one, transferring ownership can add months to the process and be quite challenging. Knowing how to transfer property after death can help you navigate these situations and protect your new asset. So what is real estate conveyance and how can it help you?
Conveyance
Conveyance in real estate is the legal process of transferring property ownership from one person to another. This transfer happens through a legal document like a lease, contract, or deed. Once this document is signed, the title is officially transferred to the new owner.
Conveyance is an essential step in any real estate deal and one reason why many buyers choose to get title insurance. Depending on where you live, you might also have to pay a conveyance or real estate transfer tax. If you’re buying or inheriting property, the conveyance process is how you legally confirm ownership. It also ensures that if one party tries to back out of the deal, the other can take legal action to enforce the agreement.
Wills and Probate
The easiest way to transfer property is through a will. When someone dies, an executor will carry out their will (often a family member) and fulfill their final wishes. If the will names an heir, that person inherits the property. If there’s no will or the heir has also passed away, the process moves to probate, where a court-appointed administrator handles the distribution of assets. In many cases, those who inherit property through probate may not want to keep it and may choose to sell it instead, often to a cash buyer.
Trusts
A trust is another common way to transfer property, allowing the process to skip probate entirely. In a trust, the property owner (grantor) places the property into a trust and names a trustee to manage it. When the grantor dies, the trustee takes care of the property, either selling it or managing it as directed. There are different types of trusts, and each has its benefits. For example, an irrevocable trust can reduce estate taxes. Selling a property in a trust involves working with the trustee, who handles the sale and transfers the title to the new owner.
Joint Ownership with Right of Survivorship
If a property is jointly owned, such as by a married couple, the surviving owner automatically inherits the deceased owner’s share when they pass away. This is known as joint ownership with the right of survivorship. The surviving owner then becomes the sole owner and can do whatever they want with the property. It’s important to update any wills or trusts after this change in ownership.
Estates
If multiple people own a property and they all pass away at the same time, each person’s share goes into their own estate. The distribution of these shares follows what is outlined in each person’s will. This is usually straightforward when it involves spouses, but complicates things if partners or friends own the property. In such cases, resolving ownership can take months or even years.
Understanding these different situations can help make the conveyance process smoother, ensuring a quicker and easier transfer of ownership.