It’s a subject most people don’t like to talk, read, or even think about. But it’s a necessity to be dealt with: What happens to your home when you die?

When you pass away or become incapacitated, managing your final wishes can be devastatingly emotional and messy for your loved ones. So it’s important to sit down and make key decisions about a lot of things. High on the list: how to pass down your assets—mainly property—to your heirs.

To explore the ins and outs of incorporating real estate into your estate plan, we talked to Lucy Marsh, professor of law at the University of Denver in Denver, CO. Marsh specializes in property law and estates and trusts, so if you heed her advice, you can rest easy knowing your affairs are in order.

Q: Do you really need to make a will to pass down real estate?

No, but it’s a good idea. The intestate statute will automatically pass your land, and your other assets, to your closest relatives, in accordance with the laws in your state. But if you want the land to stay together or go to a particular person then, yes, you need to write a will.

Or let’s say, for various reasons, you don’t want your heirs to inherit your property or other assets. Without a will, you can’t allocate where you do want the property to go in lieu of not-so-favored relations, and that’s where things get messy. If you don’t have any kids (and don’t plan to), you can choose nieces, nephews, siblings, or even charities as beneficiaries, but make sure you provide primary and backup names and spell out that certain individuals shouldn’t profit from your estate.

Q: What happens when a homeowner doesn’t have a will?

Without a will, the person’s estate is considered intestate and goes into probate, which is the legal proceeding by which someone’s assets are sorted out by the courts.

The land, and everything else the person owns, will be distributed according to the intestate statute in the state where the person was living when he or she died. It typically takes up to a year (or more) for a probate case to work its way through the system and can get expensive since you almost always need to hire an estate attorney. Probate does have the benefit of cutting off creditors’ claims by the end of the process.

Q: How is a home, whether it’s a primary or vacation property, tackled in a will?

The first question to ask: Is it designated as a joint tenancy or tenancy in common? In a joint tenancy, two people co-own the property in equal shares. So if one person dies, the ownership of the property automatically gets transferred to the surviving owner without a will. This is considered right of survivorship. All you have to do is record a copy of the death certificate for the deceased joint tenant.

Common tenancy means that two or more people can own a property in varying parts. Unlike joint tenancy where ownership must be assumed in equal shares at the same time, common tenancy can occur at different times where owners are added (or removed) from the property’s ownership. Tenants in common, unlike joint tenants, have no rights of survivorship unless the deceased’s will specifies that his or her interest in the property is to be divided among the surviving owners. Otherwise, the owner’s share of the property belongs to his or her estate, and a will directs where that share goes.


Q: What happens after an heir inherits the property?

The person who inherits the land takes it, subject to whatever mortgage exists. That person needs to make a will immediately, if they don’t have one already, to make it clear what should happen to the property in the event of his or her own death. The heir can choose to keep or sell the property.

Q: Can you allocate portions of your property to go to different people?

The short answer is yes. Property can be split up any way you want; you can give one heir a larger percentage than another heir if you wish. If you have considerable real property assets, you might decide you want one house to go to one child and another to go to your second child. You can split up land into tracts, too. It’s always a good idea to name contingency heirs in the event that your heirs die before you do (and before you have a chance to update your will).

Q: If both spouses die at the same time, what happens to their property?

If two people own land and die at the same time, uniform probate code states that each half of their ownership would go into their own estate. And that means each person could designate their own heirs or beneficiaries to inherit their half of the property.

Q: How does a trust work and how does real estate factor into it?

For starters, a trust is not a will; a final will comes into play after you die and it states your final wishes. On the other hand, a trust is a legal document that essentially puts your assets into a box and asks someone to manage it while you’re still alive but incapacitated. You select a trustee and a back-up trustee in case your first choice is unable (or unwilling) to act on your behalf.

There are two types of trusts: a testamentary trust, which is included in your will, and a living trust, which is created while you’re alive. Both types of trusts can include land.

A living trust, which is another way to keep your assets out of probate, can be either revocable or irrevocable. Once assets are placed in an irrevocable trust, the property no longer belongs to the homeowner/grantor but rather the trust. Just like renting a house or leasing a car, the assets are still there for your benefit, and a trust can sell the house and buy another. The great disadvantage, though, is you can’t change your mind and you’re stuck with your original decisions.

An irrevocable trust can provide the best possible protection of assets from claims by creditors, as the assets have literally changed ownership from the grantor to the trust. This is very different from a revocable trust situation where the grantor retains complete ownership of the property until his or her death. The major practical issue with a living trust is you might forget to put assets into it, which subjects those forgotten assets to probate.

It’s smart to put your wishes in writing so your children or other beneficiaries are not left trying to sort everything out while they’re grieving, too. A lack of a will or unclear directions can complicate relationships and cost thousands of dollars in attorneys’ fees. Have a frank discussion about your estate plans with people who should be in the know, and you’ll (hopefully) avoid confusion and bitter squabbles down the road.


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