How Should Title Be Held

By Cindy Tansin

If you are buying or refinancing your home, the title company should be asking how you want to hold title. However, if you don’t specify up front, they will likely record your deed under your name(s) as a married couple or un unmarried person. What does this do for your children or heirs when you pass on? Nothing. With a married couple where one spouse outlives the other, it may not be as big a deal. But if you are unmarried, your heirs will not gain control of the property until a long and expensive probate period passes, and then it’s up to the courts to decide who among the claimants get what.

So, being an unmarried person, when I had a recent mortgage event, I thought it was my opportunity to put my kids on title. This turned out to not be as easy as I thought. Apparently there are no “In Trust For” or “Transfer on Death” options in real estate like there are on bank accounts. There are only sole or joint owner options. If I put my kids on as joint owners, it would require them to sign off on anything I do with my mortgage. Since they are young adults, and who knows how accessible they will be over the years, this option did not seem feasible, so I ended up vesting as an unmarried woman. It was clear that I could no longer put off doing proper estate planning.

Living Trusts and Wills are the appropriate way to address this problem, and in most cases it’s better to have both – not just one or the other. The Living Trust spells out the disposition of your assets upon your death or incapacitation. If the home is titled in the Trust, it reverts to your named beneficiaries upon the presentation of the appropriate paperwork. Very clean and simple. While the Trust deals with assets, the Will addresses guardianship and can also assign ownership of any miscellaneous “forgotten” assets to the Trust. If you have minor children a Will is absolutely needed. If they are older, it’s still a good extra precaution.

You have choices when it comes to getting your Living Trust and Will done. Obviously a trust attorney can handle all needs big and small. There are also legal fiduciaries who are not attorneys who can provide the templates and do the legal filings. There are even DIY options online. If you are lucky, your employer might offer a legal plan benefit where, for a small montly fee, you can enroll with the goal of doing your estate planning and potentially enjoy other side benefits throughout the enrolled year. 

No matter which way you go, your most important asset – your home – should be vested properly. Don’t settle for the go-to vesting. Plan now and be ready before your next mortgage event occurs.