Transferring Property After Losing a Spouse
Oct 27, 2020
Dealing with the loss of a spouse or loved one is heart breaking and overwhelming. There are so many details you need to get together and tasks you need to complete. You might not even know where to start after you lose a loved one. Thinking about how your home is titled is probably the last thing on your mind. A Termination of Decedent’s Interest is an easily forgotten form that needs to be done if you own real estate with the person who died, as marital property or jointly owed with right of survivorship. Let us explore what a Termination of Decedent’s Interest is, why it needs to be done, and what happens if it is not done.
TERMINATION OF DECEDENT’S INTEREST
What is it? It is a real estate document filed with the County Register of Deeds. It states that one of the owners of real estate has died and, because the property was titled under joint ownership or marital property, the deceased’s ownership rights are automatically transferred to the still living owners.
Why it needs to be done? It needs to be done to show chain of ownership. When real estate is transferred to a new owner, it must show that all current owners have transferred their share of the property. The Termination of Decedent’s Interest is filed to show that one owner has died, and their ownership was automatically transferred to the still living owner.
What if it is not done? Then the last recorded deed will show the deceased person still has ownership interest in the property. A Termination of Decedent’s Interest will have to be filed prior to transferring or selling the property. It can become a real problem when a husband and wife own property together and the survivor of the two does not do this. The only person who can file a Termination of Decedent’s Interest is the still living owner. If the survivor dies without filing a Termination of Decedent’s Interest then most likely an estate would have to be open for both owners to transfer their interest, instead of just doing one estate for the last owner who died. With estate planning, the goal is to avoid probate; not to do two probate cases instead of one.
How to avoid needing this? The only way to avoid it would be to put the property into a trust. Drafting and filing a Termination of Decedent’s Interest is not difficult or expensive, so it should not be the reason you create a trust. However, there are many benefits to having a trust. Check out our blog, “What is a Revocable Trust and Do I Need One?” to find out more.
When do I not need this? If the property is owned together as “tenants in common”, then the deceased persons ownership does not automatically transfer and is instead part of their estate. People choose to title their property as tenants in common if they do not want their ownership to automatically transfer to the other owner. For example, siblings or friends that own hunting land together and want their share to go to their kids instead of the still living owners.
You do not need to file the Termination of Decedent’s Interest while you are still grieving, but it should be done eventually. If you are working with an experienced estate planning attorney, they will remind you of the need to do this and can draft and file the document for you for a minimal fee. At Pedersen Law Office, LLC we offer free consultations in all our areas of practice. We will sit down with you to understand your specific circumstances, needs and goals and figure out what is right for you and your family. Our law office serves the communities of Appleton, Menasha, Neenah, Oshkosh, Green Bay and their surrounding areas.