When you are addressing your estate plans with your spouse, you both may agree that you want your respective estates to go to the other spouse when one spouse dies. You both might even draft a will or a trust that accomplishes this goal. You also may plan to benefit your children or other heirs when each of you dies. These are appropriate things to consider when planning your long-term estates.
Jump ahead to these sections:
- Who Owns the House After a Spouse Dies?
- What If the Surviving Spouse Isn’t on the Deed?
- Who’s Responsible for the Mortgage After a Spouse Dies?
What many couples assume however is that when one spouse dies, the home you have shared during your entire marriage will automatically transfer to the surviving spouse. Although this may be the case, it is not because you are married and living in the marital home when one of you passes away. Instead, the ownership of the home depends on how the house is titled and whether the decedent spouse has existing children either from the current marriage or a previous marriage.
Here are the possibilities for securing the legal title to your home when your spouse passes away. You should consider these possibilities as you prepare your long-term estate plans for you and your family.
Who Owns the House After a Spouse Dies?
When two spouses live in their marital home together, it is usually because they purchased the house after they were married and titled the house in both of their names.
However, ownership of the house still depends on how the house is titled to both spouses. There are usually three options for how the house may be titled in both of the spouses’ names. They are known as the following: joint tenants with rights of survivorship, tenants in common, and a life estate.
Joint tenants with rights of survivorship
When spouses hold title to their marital home as joint tenants with rights of survivorship, this means that they both equally own the home in its entirety. So, much like a joint bank account, if one spouse dies, the surviving spouse will continue to own the property in its entirety. The surviving spouse becomes the sole owner of the property.
Once the surviving spouse becomes the sole owner of the property through right of survivorship, they have the right to dispose of the property as they wish. They can sell the house if it becomes too expensive to maintain or they can leave the house to their children in their Last Will and Testament.
Tenants in common
When spouses title their property in both of their names but without rights of survivorship, they will own the property as “tenants in common.” This means that both parties have an equal interest in the house, but they each do not own the house in its entirety. Instead, each party owns half of the house.
When one tenant in common passes away, the surviving spouse is entitled to retain a one-half interest in the property. The other half of the property still belongs to the decedent spouse and will pass to their estate. The decedent spouse can rightfully leave their half-interest in the house to a designated beneficiary in their will. If there is no will, then the decedent’s investment percentage of the house will pass to their heirs through intestate succession, as defined by state law.
The decedent spouse could leave their half-interest in the house to the surviving spouse in their will, but that half-interest can only be secured by the effective transfer of title through the probate process. It does not automatically transfer to the surviving spouse.
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It is possible that both spouses are named on the title to the home, with one spouse owning a full interest in the house and the other spouse owning a “life estate.” A life estate means that the party has rights to the property only for their life. Upon their death, their interest would terminate and the surviving spouse would be the sole owner of the property.
If the spouse with a full interest in the property dies first and the spouse with the life estate is the surviving spouse, then the property would pass through the decedent spouse’s estate in probate and the surviving spouse would have a right to remain in the house for the remainder of their life. Upon their death, the ownership of the home would pass to the beneficiary named in the first decedent spouse’s will or to their heirs, if there were no will.
What If the Surviving Spouse Isn’t on the Deed?
If one spouse dies and the surviving spouse is not named on the title to the house, then the property will pass through the decedent spouse’s estate--either through a will or intestate succession. If the decedent spouse names the surviving spouse in their will as the beneficiary of the interest in the house, then the surviving spouse will be the new owner of the house upon proper transfer of title.
If the decedent spouse did not have a will, then the house will pass to the decedent spouse’s heirs. However, the surviving spouse will have a right to remain in the house (called a “homestead” right) for the remainder of their life. The only limitation may be that the surviving spouse may not sell the house during the remainder of their life. When the surviving spouse dies, the house will then go to the decedent spouse’s children or other heirs entitled to the home under state law.
Who’s Responsible for the Mortgage After a Spouse Dies?
Who is responsible for the mortgage after a spouse dies depends on how the house is titled upon the death of the spouse.
If the house is titled solely in the name of the decedent spouse, then the decedent’s estate will be responsible for paying off the mortgage on the house. This will take place before passing the property to the beneficiary named in the decedent’s will or to the decedent’s heirs, if the decedent spouse had no will. If there is a will and the surviving spouse is named as the beneficiary in the decedent’s will, then the surviving spouse may be responsible for any portion of the remaining mortgage that is not covered by the decedent’s estate.
If spouses own the property jointly, then the surviving spouse will own the house and will be responsible for the continued mortgage payments on the house. When one spouse dies, the surviving spouse also named on the title will always have an opportunity to pick up the responsibility for mortgage payments. A bank cannot simply foreclose on a home when one spouse dies if another spouse is named on the title.
Home Ownership After a Spouse’s Death Depends on Title
Many spouses believe that when one spouse dies, the other spouse will automatically become the sole owner of the house. It is important to note that this is not always the case. Ownership of a home after one spouse dies is very much dependent on how the house is titled in the spouses’ names.
To be sure who will have an interest in your house when one spouse dies, identify who is named on the title of your property. An estate planning attorney will be able to explain exactly how the house is titled and who will retain an interest in the home if one spouse dies.