Showing posts with label Decedent's estate. Show all posts
Showing posts with label Decedent's estate. Show all posts

Tuesday, August 10, 2021

Real estate title after the parents die; don't believe everything you read on the Internet

The road to hell is paved with good intentions, but sometimes it's just bad advice


So, a recent consumer help column discusses the ownership of real estate after a parent dies. Here's the lede:

What happens if I don’t change a deed after a parent dies?



Q. In the situation of parents who transfer property to a child and the child’s spouse, and after a while, both parents pass away, what is the obligation or responsibility of the child and spouse in notifying the authorities — the county register of deeds and the city or township tax assessor — about the death, in order for the property tax records to properly show ownership of the property? And when this has not been done for more than three years after the death of the last surviving parent, are there consequences?
— Beneficiary

[Our comments are in brackets]

A. We’re sorry to hear about the loss of your parents.

The New Jersey Recording Act requires that deeds must be recorded, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park. [Yes, they do, but only when a deed exists.  This statement implies that in this situation a deed MUST be recorded.]

She said the failure to record a deed will make it impossible to sell the property or obtain a mortgage or a line of credit. [Not true.  Title to real estate devolves upon the death of an owner in accordance with a state's inheritance laws and how ownership is held.  For instance, upon the death of a joint tenant, title automatically vests in the co-owner without need for estate administration. If property is devised to a third party, title to the property becomes vested in the beneficiary upon probate of the Will.] Plus, judgments or liens against the prior owners could attach to the property. [These judgment or liens are already attached to the property.]

“The transfer should be exempt from New Jersey Realty Transfer fees because the conveyance was from a parent to a child,” Whitenack said. [A deed from the estate to a beneficiary is exempt from RTF on that basis.] “However, if the parents were wrongfully or fraudulently receiving a tax credit or deduction on the residence on property they no longer owned, there could be serious consequences affecting the estate of the parents.” {They lost us on this one.]

It’s time to get the paperwork done.

[Getting the title into the name of the beneficiary is a good idea but I wouldn't lose sleep over it. A letter to the tax assessor with a copy of owner's death certificate asking that the assessment be changed and bills sent to a new address should be sufficient to avoid errant tax bills.]

[We're glad to answer any questions you might have.  Call us.]

This story was originally published on July 26, 2021.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
@vestedland
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