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Need to Knows: Survivor of Estate

This week, we’re starting a series called, “Need to Knows,” where we’ll cover common topics our clients ask our attorneys. First on the docket: what survivors need to know after the death of a spouse.

By: Diane Puthoff

Tragedy hits your family when you least expect it…suppose your spouse dies in a tragic accident or after a courageous battle with cancer.  During this time of grief, you have so much to handle, but fortunately, you have been true partners in life and hold all your accounts and real estate in joint tenancy so that you do not need to worry about probate.  But, do you?  Are you missing something?  After all, you can still live in your house and access all of your bank accounts even though your spouse is now gone.

You should meet with your attorney now just to be sure everything is in order.  Just because you think you have planned ahead and hold all your assets in joint tenancy does not mean you can avoid that call to your attorney entirely.  While you may have been able to avoid the probate process, you still need to take a few additional steps to transfer your house and accounts into your name.  As hard as it might be to take this step, it will make things significantly easier on your family when they try to transfer these same assets into their name at your death and follow the wishes of your estate plan.

Now, none of this needs to be done immediately – your attorney does NOT need to be the first person you call after your spouse dies.  Obviously you need to take some time to grieve and get used to this major change in your life, but I do recommend that you address this in a few short months after the loss of your spouse so that it does not get forgotten or something does not happen to you in the meantime.

Let’s look at what happens when a spouse dies.  Even though your life continues on as if nothing has changed, you need to physically remove his or her name from all of your joint accounts and also from your home ownership so that there is no question of who owns the accounts and house at your death.   Bank and investment accounts can generally be transferred by presenting a copy of the death certificate and proof that you are the remaining joint tenant to the financial institution.  Real estate is a little trickier as you need to have a special “surviving spouse affidavit” prepared and recorded in the local recorder’s office to prove that you are the remaining owner of the property.  Without this affidavit, the ultimate sale of your property can be delayed or postponed until you can first show proper proof that your spouse has died and that you are the rightful remaining tenant.

Far too often in my 15 years of practice, I have seen folks skip over this very simple and inexpensive step for fear that they might have to open a full probate matter, and this error comes to light years later only when the surviving spouse dies and their children try to sell their parents’ home.  At that time the children are faced with not only their remaining parent’s death, but also reliving their other parent’s death by having to either open a probate matter to change title to all the assets (i.e., open 2 probate matters – one for each parent) or worse yet – the period to open a probate on the first parent has expired (you only have 5 years to open a probate estate after a person dies) and now they must incur added legal fees to try to provide adequate evidence to all the financial institutions and land records department that both parents are deceased so that they can liquidate funds and sell the house.

If you or your parents are faced with this scenario, I urge you to reach out to your attorney now to get this cleared up now before it is too late.  A few steps now could save you much time and money down the road.

Diane practices on our Estate Planning team, helping clients craft plans to meet their business and family’s needs. Learn more at https://www.l-wlaw.com/attorneys/diane-e-puthoff/.