Say that a husband used his inheritance to purchase the family home outright. The wife signed a quitclaim deed to him to put the property into his individual living trust with the condition that if he died before his wife, she could live in the home until her death.
But what if the husband or the creator of the trust never signed the living trust? In that case, what would happen to the property if the husband were to die before the wife?
This can quickly become even more complicated if it’s a second marriage for each of the spouses and they have adult children from prior marriages.
The Herald Tribune’s recent article, “Home ownership complications need guidance from estate planning attorney,” says that in this situation it’s important to know if the quitclaim deed was to the husband personally or to his living trust. If the wife quitclaimed the home to her husband personally, he then owns her share of the home, subject to any marital interests she may still have in the home. However, if the wife quitclaimed the home to his living trust, and the trust was never created, the deed may be invalid. The wife may still own the her original interest in the home.
It’s common for a couple to own a home as joint tenants with rights of survivorship. This would have meant that if the wife died, her husband would own the entire property automatically. If he died, she’d own the entire home automatically.
If the wife signed a quitclaim deed over to him or his trust, and the deed was recorded, then she would have transferred her ownership rights to her husband and he would be the sole owner of the home. If the deed was never even filed or recorded, the wife could simply destroy the document and keep the status of the title as it was.
If the trust doesn’t exist, her quitclaim deed transfer to an entity that doesn’t exist would create a situation where she could claim that she still owned her interest in the home. However, the home may now be owned by the spouses as tenants in common, rather than as joint tenants with rights of survivorship.
To complicate things further, if the husband fully owned the home at the time of his death and the wife has marital rights in the home, then she may still be entitled to a share of the home under her husband’s will, if he has one, or by the laws of intestacy. However, the husband’s children would also own a share of his share of the home. At that point, the wife would co-own the home with his children.
You can see how crazy this can get. It’s best to seek the advice of a qualified estate planning attorney to guide you through the process and make sure that the proper documents get signed and filed or recorded.
Reference: The (Sarasota, FL) Herald Tribune (September 8, 2019) “Home ownership complications need guidance from estate planning attorney”