Attorney Thomas B. Burton answers the following question in his popular Real Estate Q&A Series: "Does House Pass to Me When Dad Dies or Does Bank Take It?"
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Hello, I'm Attorney Thomas Burton and welcome back to our popular Question and Answer Series here on the channel.
Today's question is the following: "My dad is going into hospice and passing soon. The house is in his name but has a loan out on the house. He has no will. If he passes, does the house transfer to me and I take over payments or does the bank get it? I've been living there for years."
First of all, I'm sorry to hear about your father going into hospice and it sounds like he may be not with us very much longer. You mentioned in your question that he has no will, so I'm going to also assume he has no trust. If he had a will or a trust and the house was in the trust for example, it would pass according to whoever was named in the trust or if it was in the will, then it would have to go through probate court and pass according to the will but if he has no, neither of the above, then the house is going to pass according to the title. So if your dad is the only person on the title, it's in his name alone, then and he dies without a will, then it would go to what's called his, it's called 'Dying intestate', without a will and it would pass according to the laws of intestacy in Wisconsin to determine who would get it. Then we would have to look at does he have a surviving spouse and if there's no surviving spouse, then generally it would go to the children. You mentioned it's your dad but you didn't mention if you have other siblings, that would factor in here.
If you're the only living child and there's no surviving spouse then it's possible you could be the only heir but if there are other children or surviving spouse, the spouse would likely take precedence depending if it's also your parent, if you're the child of both parents.
If your father is able, while he's still with us, I would suggest he get in touch with an estate planning attorney who could go through this with him and either help him set up a will or look at the title to the house and think about ways to avoid probate on the house completely, if his intent is to leave the house to you.
Now, if you are living in the house regardless of the above, you would not automatically take title to the house. There would have to be a legal mechanism to get it to you. So either the will leaves the house to you and then you go through probate court after death or the deed directly could leave the house too but in either event, if there's a mortgage on the home, you mentioned a loan, you would take the house subject to any mortgage that needs to be repaid. So they have a priority lien on the home and regardless of whether you inherited the house through a will or through a trust or by deed, it would be subject to the mortgage. So if you took over the house, let's say you inherit the house you would still need to pay off the mortgage at that point on the property. It wouldn't release the loan at his death, if that makes sense.
In either event, you're not going to automatically take title of the house because you live there. I understand you've lived there for a while and I'm sympathetic but your father would need to take legal steps to make sure the house goes to you, after his death. If that is indeed his intent and again, the mortgage will survive his death because it's attached to the property and whoever inherits the home or takes title to the home, would have to pay that mortgage off.
Again, I suggest you get together with a qualified estate planning attorney who could help him get his wishes in place before he's gone because in my experience, it's much easier to do while the person is alive. Once they're gone, you may be the heirs we discussed and you may have to deal with it but it likely will be a much larger mess to deal with.
So again condolences to you and your father as you're going through this but I hope that's helpful to you as you consider your options with the house and for other viewers watching, real estate, a house is often the asset I see pulling people into probate court after death because in Wisconsin, the smallest state limit is $50,000, if you have more than $50,000 of equity in real estate which in today's real estate market is a lot of real estate with a house on it, it's going to pull you into probate court unless you have a plan set up to avoid probate such as using a trust or other methods. That's why I suggest they look at that here in order to get the house to the person desired.
So excellent question, thank you for asking, thank you for tuning in and we'll see you next time.
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