State laws will determine what inheritance rights, if any, a child will have in a parent’s home after death. To get a complete answer to this question, review three main areas of law with a qualified probate or estate planning attorney: family law, property law, and probate law. A parent can only “gift”, or leave behind, property that actually belongs to them.
The first issue is to establish whether the parent actually has a legal property interest in the home. If your parent re-married, and their new spouse already owned the home, then the new spouse’s home will be considered separate property if they lived in a community property state unless payments are made on the home from community property sources. Depending on that state’s family code, exceptions may apply. Keep in mind, however, that merely living in the same home may not be enough to give your parent a property interest. Alternatively, if your parent remarried and did participate in the purchase of the home, then they will have some type of property interest in the home. You then turn to property law to classify their interest in the home.
Property codes will generally control the form of ownership of the home. If a married couple purchased a house together, most purchase agreements will result in the couple owning the home as “joint tenants with right of survivorship” or “tenancy by the entirety.” This form of ownership means that the home passes automatically to the surviving spouse through the right of survivorship upon the death of one’s spouse. The house does not become part of the deceased parent’s estate and does not pass to his/her children from a prior marriage at the time of death. Even if a child files for a probate of the estate, or review by a court, this type of ownership will preclude a child from asserting an interest in the home.
If the home is not held in some sort of joint ownership with a right of survivorship, then the home may still be considered part of your parent’s estate. Their state’s probate code would then determine how the property will be divided. The threshold question in any probate is whether the spouses executed a will or trust agreement. A parent can elect to pass all of their interest in the family home to their spouse by a will or trust agreement. Absent some evidence of fraud, mistake, or duress, most probate courts will uphold these types of agreements or transfers. If there is no will, meaning someone dies intestate, the home passes according to state intestacy laws. These laws have general guidelines setting out who gets what and how much. Typically, one-half of the interest in the house passes to the surviving spouse, and the remaining one-half passes to all of the parent’s children, including those from a prior marriage. The children’s half is usually divided equally among the children. How title to the residence is held significantly impacts whether the children of a prior marriage will be able to assert an interest in the family residence when their parent passes away.
Be sure to consider your estate planning options at the same time you are purchasing property. The form of title can be a cost-effective way to make sure that your interest in the family residence passes to the intended person(s) when you pass away. Alternatively, if there are reasons that title cannot be taken in joint form, such as asset protection or individual credit ratings, consult with an experienced estate planning attorney who can advise you on how to use a will or trust arrangement to ensure that the family home passes to a surviving spouse as intended. A little planning now will save your family from enduring more heartache later.