Avoid Probate and Maintain Control
In our previous two articles, we addressed Probate & Limited Liability for Real Property and Adding Joint Tenants to Real Property to Avoid Probate. This third article will wrap up this series as we discuss avoiding probate and maintaining control of the real property. We are going to look at this from the perspective of a Community Property State, specifically Nevada.
Let’s look at a scenario that is all too familiar when we start to consult with clients who are concerned about what happens with their real property when they pass or become incapacitated.
A parent is unmarried and has three children. Two of the children are financially successful. All three children are married. One of the daughters lives near the mother and helps Mom out with a variety of things. Mom wants to ensure that this daughter gets ownership of the home at the time of her passing so that it avoids the lengthy probate process. The Mom’s concern is that she does not have a good relationship with her son-in-law. In fact, it is somewhat adversarial. At times, the Mom and daughter also have challenging moments because Mom would like to spend more time with her grandchildren, and the daughter is also becoming dictatorial over Mom’s affairs.
Here are two challenges that Mom is struggling with.
- What if Mom wants to sell the house in the future and move closer to one of her other children? If she adds her daughter as a Joint Tenant to the Title, then two issues below must be addressed.
A. In order to sell the house, her daughter will have to sign closing documents, and Mom’s concern is, what if she doesn’t sign?
B. Even if her daughter is willing to sign the documents allowing Mom to sell, the son-in-law must also sign a Deed relinquishing his spousal interest to his wife. (Please note – Community Property laws are based on where the real property is located)
- What if Mom wants to remove the daughter and give it to one of her other two children (or anyone else)? The daughter and son-in-law both must sign Deeds and an Affidavit relinquishing interest in the Title and relinquishing Financial Interest. Mom is also concerned about what happens in the event her daughter and son-in-law divorce.
In Nevada, there is an option to transfer real property only upon the death of the named person(s) on the Title. In Nevada, it is referred to as a “Deed Upon Death,” aka “Beneficiary Deed”, or “Transfer on Death” (TOD). Other States refer to this by different terms. The benefit of this Deed is that the Title does not transfer to the daughter until after the Mom’s passing. In addition, this Deed can be revoked at any time, and Mom does not need the daughter’s consent. Neither the daughter nor the son-in-law has any control over the property while Mom is alive.
The only downside to using this approach is that after the date of Mom’s passing, the property may not be sold for 18 months. Anyone can move into the property, i.e., the daughter and her family, or she can rent it out during this period. Please check with your estate planning attorney, your CPA, and your local Title and Escrow Company. Real estate agents may not be aware of the 18-month time frame when approaching the daughter to list the property for sale.
Our Mid-Summer’s End of Year Planning series is a reminder that the holidays are just around the corner. If you have stopped into a grocery store or a Wal-Mart lately, you may have already been tempted by all the Halloween candy. Now is the time to review all your real estate holdings to make sure everything is titled precisely as you want it.
Give us a call now for a complimentary property assessment. 702.233.4014. There is never any obligation.
Quick Claim USA and their employees are not attorneys in the State of Nevada or in any other State or Jurisdiction. Quick Claim USA is not licensed to give legal advice and may not accept fees for giving legal advice. Should you have questions regarding any of the above items, you must seek the advice of independent legal/tax counsel of your choosing.
