Transferring Real Property After the Death of a Loved One

When someone passes away, their real property – like a house or land – can not remain in their name. Therefore, it’s essential that title of the property be transferred from the name of the decedent to a new party. But how does this happen in New York? In this article, the experienced probate attorneys at The Chamberlain Law Firm will explain how transferring property after death works. 

Real property must be: (1) owned by a legal entity, such as a trust or LLC, (2) owned via joint ownership with a survivorship right, or (3) be owned (in whole or in part) in someone’s name individually. If someone were to pass away owning property individually, that property must go through what’s known as the probate process. 

During the probate process, real estate needs to change title, meaning it gets transferred to someone else, including being sold.  You may be wondering why real property may be sold during the probate process. Sometimes it’s to pay off any debts the estate might have. Since estate debts must be paid before distributions are made, assets, including real estate, may be sold to satisfy such debts. Real estate may also be sold if heirs prefer to receive liquid proceeds as a distribution and do not wish to inherit the real estate itself. 

Typically, the executor or administrator of the estate is in charge of this process. Some executors have broad powers when it comes to handling the real property. In that case, they would decide to sell the property to cover various costs, like administration expenses and taxes. But there are some exceptions to the executor’s power to sell the real property. For instance, if the real property is specifically left to someone in a will, and there’s enough additional personal property and financial assets, the executor should look at using those assets first. This way, the real property can go to its intended new owner as per the deceased’s wishes.

Additionally, an executor’s authority to transfer real property may be restricted, meaning that the executor is required to seek court approval. This typically involves preparing and submitting a proposed distribution which details how the property will be transferred and to whom. The court then reviews the plan to ensure it complies to New York probate laws and that the rights of all interested parties are protected. 

Now, let’s explore different ways  in which real estate can typically be addressed with estate planning. This includes cases where property is jointly owned, scenarios involving the presence or absence of a will, and circumstances where there are no identifiable heirs to claim the property.

Jointly Owned Property

Jointly-owned property, often called “joint tenancy with the right of survivorship,” is a common arrangement between parties. Married couples are offered special protections for jointly owned property referred to as “tenants by the entities”. These forms of joint ownership have significant implications for estate planning and the probate process.

When one owner of a jointly-owned property passes away, the property does not go through probate. Instead, the surviving owner automatically assumes full ownership of the property. This seamless transfer is the key advantage of joint tenancy, as it avoids the delays and expenses associated with probate.

However, it is important to note that joint tenancy with a right of survivorship is not always the best choice to transfer real estate assets. Joint ownership gives both parties immediate ownership in the property which could subject it to creditors. Heirs can also lose out on some tax benefits if the house appreciates a lot in value after the death of the first owner.  Additionally, it’s important to consider scenarios where all owners might pass away simultaneously or within a short period. In such cases, the property would indeed be subject to probate. 

If There Is A Will

The process of transferring property after death when a will exists is typically straightforward. However, many people do not realize that even a will must go through the court probate process. During that process the court reviews the will to make sure there are no issues or disputes between heirs. Once approved by the court, the executor will be able to act pursuant to your will and distribute your assets as you indicated. Typically, this involves your property passing directly to the beneficiaries named in the will. 

If There Is No Will

When a person passes away without a will, the property is transferred according to the laws of intestate succession. Under these circumstances, the probate court (known as the Surrogate’s Court in New York) plays a pivotal role by appointing the person to administer your estate. Once the administrator is appointed, it is now their job to distribute the property following the guidelines set by New York state’s intestate succession laws. These laws determine who the rightful heirs are and how the property will be divided among them.

Relying on intestate succession is often not the preferred route for property distribution. The process can be lengthy, complicated, and may not align with the deceased person’s wishes. This uncertainty and potential complexity underline the importance of having an estate plan. A well-structured estate plan ensures that your property is distributed according to your specific desires and can significantly simplify the process for your heirs.

If There Are No Heirs

However, in the unique situation where no surviving relatives can be located and the deceased did not leave a will, an outcome known as ‘escheat’ occurs. In this scenario, the property is transferred to the state. This legal process ensures that the property does not remain ownerless.

It’s a rare occurrence but highlights the importance of having a will and a comprehensive estate plan. Such planning not only provides clarity on how your assets should be distributed but also prevents your property from eventually becoming state-owned due to the absence of legal heirs.

Transferring Title

In New York, the process of transferring title of real property after someone’s death varies depending on the circumstances of ownership and whether a will exists.

For Joint Tenancies

In cases of joint tenancy, there is usually nothing to do until the property is later transferred to someone else. For example, when it gets sold by the surviving spouse or after they pass away and it is transferred out of their estate. When this happens, the deed will explain the sequence of ownership for that property and mention that a previous owner passed away leaving the surviving spouse as the sole owner. 

When There Is a Will

If the deceased person was single and had a will, the executor is responsible for distributing the property from the estate, by what is called an “executor’s deed.” Many times this can be directly to the person (grantee) designated to receive the property in the will or there can be a sale from the estate whereby the beneficiaries will then split the proceeds from the sale.

When There Is No Will

In situations where no will exists, an administrator (appointed by the court) takes on a role similar to the executor. The transfer is similar to above but by an “administrator’s deed.” The administrator must follow the state’s laws of intestacy.  Where there are multiple beneficiaries, the property is usually sold and the proceeds divided, or if it is a single beneficiary, it can go directly to that person. 

The Chamberlain Law Firm Is Here To Help

Handling the various tasks involved with estate administration can be overwhelming during an already emotionally challenging time. This is where the expertise of the experienced New York probate attorneys at The Chamberlain Law Firm becomes invaluable. We can significantly ease the process of transferring property after death, assisting with the intricate details and necessary paperwork. Our guidance ensures that every legal requirement is met efficiently and accurately, mitigating potential complications.

Further, as highlighted throughout this article, the importance of having a well-structured estate plan cannot be overstated. An estate plan not only provides clarity and direction for the distribution of your assets but also spares your loved ones from the burdens of legal complexities during a challenging time.

At The Chamberlain Law Firm, our team specializes in both probate matters and the crafting of comprehensive estate plans. We understand the nuances of New York law, and are committed to providing clients with personalized support. Whether you’re looking to establish a robust estate plan or need assistance with the probate process, our attorneys are here to guide you every step of the way, ensuring your peace of mind and the secure future of your estate. Give us a call today at (201) 273-9763 for a consultation. If you’re interested in learning more about probate and estate planning, be sure to check out our Insight Articles.

This article is for informational purposes only. It is not intended as legal advice. In the event you would like to speak with a lawyer about the specifics of your case, contact The Chamberlain Law Firm at (201) 273-9763 to schedule a consultation.