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.]
“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.
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