What Happens to Homes When Owners Pass Without Wills?

what happens to a house when the owner dies without a will

Losing a loved one is always difficult. But when that person passes away without a will, it can create a legal mess for their families in taking care of their possessions – especially a home. Without clear instructions, fights can erupt over who gets the house and it can end up going to the wrong person. Fortunately, state laws provide guidance on what happens in these situations.

Let’s walk through the basics of what happens to a house when the owner dies without a will. This is governed by “intestate succession” laws that determine who inherits property. It may surprise you how a home can end up with the deceased’s distant relatives or even the state if immediate family is not available.

When someone dies without a will, they are said to have died “intestate.” This leaves many homes and other assets vulnerable to potential disputes when an owner passes away. Taking the time to create an estate plan with clear instructions helps avoid this mess down the road.

Who Inherits the House?

When it comes to the inheritance of a house after the passing of a loved one, the path isn’t always straightforward. In Colorado, various scenarios can significantly impact who ultimately inherits the cherished family home. Let’s take a look at some common scenarios that families often find themselves in and how they can potentially play out.

1. The Simple Spousal Inheritance

Sarah and David, a happily married couple in Colorado, own a house together. When David passes away without a will, the home automatically goes to Sarah, as his surviving spouse. The process is straightforward, and Sarah inherits the entire estate, including the cherished family home.

2. Blended Family Complications

Betty, a widow with two children from her previous marriage, marries John, who also has two children from his prior marriage. They jointly own a house. When John passes away, complexities arise. Betty inherits her husband’s half of the marital property, but John’s children may contest the will, seeking a share of their father’s estate, including the house. When Betty dies, the house goes to her children, not to John’s. This highlights the special need for estate planning in blended families to avoid disputes.

3. No Surviving Spouse, Equal Division Among Children

In a different scenario, Julie and Jeff have no children together, but Jeff had 2 children from a previous marriage. Jeff passes away. Julie is not entitled to the entire estate in this case. Instead, it’s divided equally among David’s two children, who may decide to sell the house and share the proceeds equally.

4. Legacy of Descendants

Lisa and Bob have one child together, Emily. When Bob passes away, Emily inherits her father’s share of the house. However, if Emily had tragically passed away before her father, her children (Bob’s grandchildren) would inherit her portion of the house, ensuring that the property remains within the family lineage.

5. Extended Family Claims

Consider another situation scenario where a couple has no surviving children. In this case, a spouses parent, if still alive, may have a valid claim to the estate, including the house. Colorado’s intestacy laws give priority to immediate family members in the absence of a surviving spouse or children.

6. The Escheatment Dilemma:

In an unlikely scenario where no living blood relatives can be found after exhaustive searches, the house may escheat to the state of Colorado. While this outcome is far from ideal, it underscores the importance of ensuring clear estate planning to prevent such outcomes.

These scenarios illuminate the intricate nature of inheritance when an owner passes away without a will. The outcome depends on various factors, including marital status, family composition, and the existence of surviving relatives. In such situations, proactive estate planning can be a crucial tool in ensuring that the family home finds its rightful place in the hands of those intended to inherit it.

Probate Process for Transferring Ownership

To transfer legal ownership of the home, the estate must go through probate court supervised by a judge. The probate process involves appointing an administrator, often a family member or attorney, who inventories assets, pays any debts owed by the deceased, and eventually transfers the property to the rightful heirs as determined by the court.

The administrator files a petition and is officially appointed by the judge after posting a bond. They must also publish notice to alert any potential creditors and unknown heirs to make claims on the estate within a set time period.

It can take several months to complete even simple probate cases. But the process can drag on over a year for more complex estates, especially those involving property disputes between heirs staking claims.

The costs and delays of probate add up quickly. Attorney fees to handle the court process are paid from the estate, potentially lasting months to years. The deceased’s home sits frozen in limbo, waiting for a judge’s approval before heirs can access it.

Heirs cannot sell or make changes to the property until officially awarded ownership through probate. Any mortgage, insurance, and taxes on a house still need to be paid throughout the proceedings. Meanwhile, heirs may have to find other living arrangements if they can’t yet occupy the home.

Options for Heirs Inheriting a House

Once the probate court finally awards them ownership, heirs who inherit the home have some options. They may choose to live there as a primary residence, generate rental income by leasing it out, or decide to sell and split the proceeds between all heirs.

If multiple heirs jointly inherit the house, the owners may disagree on the best use. One heir might want to occupy the home, while another prefers to sell for a cash payout. In that case, the heir desiring sole ownership can initiate a buyout of the other heirs’ shares at fair market value.

Co-owning heirs also have the right to partition, where they file suit to force the sale of the home and division of proceeds. The judge may order a public auction or private sale to achieve the partition. Typically, one heir will buy out the others before reaching this stage to avoid legal expenses.

There are a few special cases where the default intestacy rules don’t apply in determining what happens to a deceased’s home.

Special Cases

If the deceased owned the home in “joint tenancy” with another person, like a spouse or sibling, then the surviving co-owner automatically receives full ownership of the home upon the death of the other joint tenant. This avoids probate because the share owned by the deceased legally passes to their joint tenant free and clear.

Another scenario is if the owner had a “life estate” in the property and named a remainder beneficiary in the deed. A life estate grants rights to live in and control the home during one’s life, after which it transfers to the designated remainderman. In this case, the house would go directly to the remainder beneficiary outside of probate when the life tenant dies.

Finally, if the deceased’s home was owned under a living trust, then it passes to beneficiaries according to the terms stated in the trust document. Assets in a trust avoid probate and can be distributed more quickly to beneficiaries by the appointed trustee. Of course, the owner must set up the trust while alive for this to work.

Don’t Gamble With Your Legacy – Contact Hammond Law Group Today To Start Planning

Losing a loved one is hard enough without the added stress of legal complications over their home. Don’t take chances with your own legacy and leave your family struggling through the complex probate system.

At Hammond Law Group, our dedicated attorneys have been guiding Colorado homeowners like you to create customized estate plans for over 15 years.

Call us to schedule a no-obligation meeting with us today to discuss protecting your home for the people you love. With two convenient locations in Colorado Springs and Denver, we’re ready to help you take control and gain peace of mind, knowing exactly what will happen to your most valuable asset.

Author Bio

Catherine Hammond is the CEO and founder of Hammond Law Group, a Colorado-based estate planning law firm she founded in 2005. With a strong focus on protecting families from the legal consequences of disability and death, she creates comprehensive estate plans that minimize taxes, costs, and government interference.

A native of Denver, Catherine completed her undergraduate studies at Coe College in Iowa, and her Juris Doctorate from the University of Denver College of Law in 1993, concentrating on estate planning, tax, and mediation. Catherine is a member of various professional organizations, including WealthCounsel, ElderCounsel, the National Academy of Elder Law Attorneys, the Colorado Springs Estate Planning Council, and the Purposeful Planning Institute. Beyond her legal expertise, Catherine provides transformational coaching to support clients and their families through life transitions.

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