As a general rule, when you pass on, property that is owned jointly with a surviving spouse will become his or her property. What about when you are the survivor of the marriage or are single, what happens to your property when you pass?
When a person dies, their assets or "estate" first pays for the cost of their passing, funeral expenses and the like. Next, any outstanding debts are paid, and finally (if there is anything left) it will be distributed to the heirs. Often the person passing leaves little, if any, assets and nothing needs to be done. Family heirlooms and keepsakes have been gifted long before. For those that leave property, many states have a small estate proceeding to distribute property of minimal value. This process is simple and inexpensive, normally without attorney involvement.
Sometimes people will put their children on their bank account or add names to a car title so when they pass on, the property automatically goes to the survivor. If someone is buying a home and there is no equity, the home can simply go back to the bank. The heirs will not be responsible for that debt – only assets of the deceased will be used to pay the debt.
If there is equity in a home, there might be a reason to file bankruptcy- to eliminate the debt so when the person passes, the equity can go to the heirs. Sometimes people will add children to the deed so it automatically goes to the children upon death. Others deed the property to their children reserving what is called a life estate, which allows them to live in the home while they are alive. Then when they pass, the property goes automatically to the children. There is no probate or estate.
For our clients:
HELPS does not engage in estate planning. However, if you don't know who to speak with, you can talk with us and we can try to help you find an expert for you in your local area, with whom you can speak with for no charge.
To learn more about HELPS visit our website: http://www.helpsishere.org/
HELPS is a nonprofit law firm for seniors and disabled persons on a protected income who are being harassed for debts they can't pay. We're committed to educating people about their financial rights so they don't needlessly pay their collectors with money that should be used for food, heating, medicine, and other basic necessities.
This blog will be updated every Friday with articles and relevant information.
