What happens to the house?

Important considerations when dealing with the house

• If your loved one left a will or a trust, there will usually be detailed instructions on how to distribute real estate property.

• If your loved one co-owned the house, it may pass directly to the joint owner, depending on the type of ownership.

• If the house was left to multiple people, there will need to be a mutual decision among them whether to keep or sell, and who will live there.

• If there is no will or other estate plan, the house will pass to heirs according to state law.

• Before ownership is transferred, it is important to continue regular upkeep of the house.

Dealing with the death of a loved one is always challenging. When you add in issues of property and inheritance, intense emotions can clash with complex legal processes. The question of what to do with someone’s house after their death is intricate and nuanced, making it a confusing responsibility that we have to take care of while we are also grieving.

Of course a home is also often a place of comfort, where memories and traditions were formed over many years. Family members may have emotional connections to the house that need to be considered when you’re deciding what to do with the property. 

On top of that, the legal process to gain control of the house can take time, and in the interim someone will need to make sure the physical house and yard are maintained. It’s a complicated situation with many moving parts that can be difficult to prioritize, especially at an emotionally draining time.

Here is an overview of some of the legal situations you might encounter while you’re working through this issue, and how to handle them while you and your family have so many other concerns on your plate. Every situation is different, however, and for complex inheritance issues we highly recommend that you contact a lawyer, an accountant, or both, depending on your situation.

When there is a will or a trust

If your loved one made an estate plan, they will usually have included detailed instructions for what will happen to any real estate property, either in their will or by placing it in a trust. When this is the case, an executor or trustee will be assigned, and ownership will be transferred through a county or state government office. 

If the plan for the property is outlined in the will itself, the executor will maintain the house during probate. They will either sell the house and distribute the proceeds to will beneficiaries or transfer the title to the beneficiaries at the end of probate.

In other cases, the will may make reference to a trust that the house has been placed in. Generally, this kind of living trust will include a deed to the property that shows the transfer to the trustees. It might say something like, “To John Smith Jr., trustee of the Smith Family Trust dated November 20, 2020.” 

You might instead encounter a transferable-on-death deed, a kind of deed that exists in about half of US states, in which your loved one will have specified the new owner of the property. All the beneficiary named in this deed needs to do is file an affidavit and a copy of the death certificate to the records office in the county where the person resided, and they can take possession of the house.

If your loved one co-owned the house, whether with a spouse, a business partner, or someone else, it may pass directly to the joint owner, depending on the kind of ownership. Co-owners often have an arrangement known as a joint tenancy with right of survivorship; in this case full ownership automatically transfers to the surviving owner when the other passes away.

When several people inherit a house together

If you inherit the house together with one or more siblings or other relatives, there are multiple ways to approach what comes next. You might all decide to keep the house and appoint someone to be its primary resident. You might decide to continue to own it together and use it as a family vacation home.

You could all agree to continue owning the house equally and convert it to a short- or long-term rental property, dividing the profits. And of course, there’s always the option to sell and split the proceeds.

Even though it’s an emotional decision during a difficult time, agreeing on what to do with the property is definitely the least taxing route. 

Enter into conversations on this topic with sympathy and an open mind. There are bound to be opinions and desires you will need to reconcile. Keeping the peace might be difficult at times, so a positive attitude can make a big difference in the outcome for your familial relationships.

Unfortunately, everyone doesn’t always agree on the best approach, and this is not a situation where people can agree to disagree. If various family members want different things, you still have options. Those who would like to keep the property can buy out anyone who wishes to sell, either with a cash buyout, a mortgage, or a private arrangement. This might mean seeking out a loan for estate funding and refinancing the home, or agreeing to a promissory note that outlines the monthly installments plus interest that the resident of the home will pay. 

Regardless of approach, a decision or arrangement must be made. Legally, it doesn’t work to simply declare that the majority rules or, worse, to go behind a co-inheritor’s back and sell without full consent. If you can’t seem to come to an agreement on your own, you’ll have to file what’s called a lawsuit for partition, which asks a judge to order the sale of the home. Before it gets to that point, know that there are mediators and lawyers available who specialize in these situations.

When there is no will 

If there is no will—and there was not an estate plan involving trusts or another way for the house to pass outside of probate—then the house will pass to heirs according to state law.

If your loved one was the sole owner of the property, the house will go through the probate process with the rest of the estate, and state intestacy laws will decide who inherits it. It is important to note that in these cases, the court does not consider sentimental or interpersonal relationships. Inheritance without a will follows a strict set of rules, which can seem cold and may leave close family members you care about (like step-children or unmarried partners) feeling slighted. 

A decision made by the courts might also create co-ownership between family members with less than cordial relationships, which can produce tense discussions. If you find yourself in this situation, you might want to seek out a mediator or lawyer to keep the peace.   

No matter the situation, when the courts are involved things can become arduous and take a long time. Be prepared to do research, sign paperwork, and possibly spend some time filing papers and attending court hearings. It’s always advisable to contact a lawyer for advice on your specific situation.

What to do while it’s all being decided

After a loved one’s passing, there is always a period of time when things are up in the air and the list of tasks that need to get done feels never-ending. 

While you’re waiting for official deeds, escrows, and other logistics, here are some things that should be taken care of with regard to the house: 

• Change the locks, alarm codes, and security system passwords on the property to keep it safe. You may also want to consider having someone stay there, whether a family member or a house sitter, so that it does not appear vacant. 

• Keep track of services and pay any bills for the property like water, electric, landscaping, and maintenance.

• Look after pets, and water (or give away) plants.

• Start sorting through household property and, if possible, donate anything that won’t be wanted by the family (like clothes, furniture, etc.). 

• Clean out all perishable items from the refrigerator and cabinets.

• Regularly mow the lawn, maintain trees and gardens, and rake in the autumn if necessary (or hire someone to do so). 

• If the house is in a cold climate and nobody is regularly using it, make sure it is winterized before freezing temperatures come, including flushing pipes so they do not freeze.

Our homes are usually our most personal and intimate spaces, and when we’re responsible for a departed person’s property, grief will almost certainly become tangled with nostalgia. For you and your family, what to do with the house might feel too businesslike. But it’s also a chance to reflect and ask yourselves what’s best for everyone involved. Remember, a house is only a physical place. Your memories of your loved one will continue on outside of its walls.

You may be eligible for free bereavement support. Empathy can help with everything from funeral planning to estate administration, with step-by-step guidance and real-time expert support. Many people get free premium access to Empathy as a benefit with their life insurance claim. We partner with New York Life, Guardian Life Insurance Company, Bestow, Lemonade, and other leading carriers. When you make your life insurance claim, talk to your representative about whether Empathy is a benefit they offer.