If you’ve recently inherited a house, congratulations! This can be a great opportunity to build your net worth and improve your living situation. However, in order to reap the full benefits of this inheritance, you’ll need to put the home in your name. In this blog post, we will walk you through the process step by step!
How You Inherit Property in Texas Matters
So legally, inheriting a house means that you’ve received the home from a deceased person through one of a few different ways. Inheriting from someone with a well-thought-out estate plan with a will makes it easier. However, regardless of how you inherit, your real estate attorney can help you sign the deed and make the home legally yours.
Let’s look at the ways you may have inherited property from the previous owner.
Inheriting by Word of Mouth
If the rightful owner tells you that you’ll inherit when they pass away, but you haven’t gone through the legal process yet, you’ll need to start with the legal ins and outs to ensure that the property deed is in your name.
If a probated will states otherwise, or there is a TODD, you’d need to contest the will to inherit the home.
However, if there is no last will and testament, you may use an affidavit of heirship if the estate consists mostly of real property titled in the deceased’s name.
You can file the affidavit with the county deed records. However, this is not the preferred method to inherit property since it does not transfer the title to you as the new owner. Instead, the inherited home’s county keeps a record of your affidavit. After 5 years, you may work with the courts to create ownership title in your name through the court system according to Texas Estates Code 203.001.
To learn more about filing an Affidavit of Heirship, talk with your real estate attorney and ensure you have the legalities covered to keep your inherited house!
Transfer on Death Deed (TODD)
A TODD is a legal document that can grant deed to a new property owner immediately upon death. The inherited house simply moves hands without the need for probate.
These deeds are straightforward and easy to file with the help of your attorney when planning your estate. They can also be part of a will.
Small Estate Affidavit
Sometimes, property goes through a small estate affidavit filing and skips the probate court. This is only for an estate worth less than $75,000, excluding the real property.
Once the judge approves the affidavit, you receive a certified copy, and another certified copy of the affidavit and order of approval go into the county property records. Then it’s just a matter of bringing the legal documents to the county where the property is.
When a loved one dies, their estate often goes to a probate court where a judge helps to settle all debts and inheritance issues based on the last will and testament. However, probate can cost thousands!
I Inherited a House! How Do I Put It In My Name?
With housing prices going up in the Houston area, receiving a home is a boon to your net worth! And you may have a nicer living situation too!
Taking care of the legalities protects you in case the unexpected happens. Putting the deed in your name shows that you have the legal right to own the home. The legal right is called “title.” So if you own title to the home, the deed should be in your name.
Transfer of Deed Process:
The process may vary depending on how you inherited the home at the person’s death. You may also need to pay a filing fee.
- Find the actual deed to the property. If you don’t possess the deed, contact the clerk of court in your county for a certified copy. If you are paying on a mortgage or deed of trust, they have the deed, and you’ll need to work with the trustee or mortgage company to change the name on the deed.
- As a legal beneficiary, you’ll need to show proof that you are the legal owner of the home. This could be a probated will, a transfer on death deed, or a gift deed. Also, bring a copy of the death certificate with you.
- Create a new deed with your notarized signature using your full legal name.
- File documents at the Real Property Department of your County Clerk’s Office.
Property Taxes and Inheritance
With a TODD or if you find a gift deed after your loved one dies, the property’s value basis is stepped-up at death. A stepped-up value basis means that you will not pay taxes if you decide to sell the property.
However, when someone is transferring title while living, the inherited home does not step up in value, and you can end up paying capital gains taxes on the fair market value if you sell later on.
Inheriting after a family member dies before the property transfers ownership
Type of Ownership in Texas
If you received inherited properties as a sole heir, then you are the sole owner of the property. However, if you inherited with other co-owners, there are a few ways you can own the homes.
Community Property Ownership
If you are a married couple in Texas, you automatically own the property 100% as your marriage’s community property. You can also own together with right-of-survivorship so that if one of you dies, the other inherits the property automatically. A right-of-survivorship clause means that the property passes directly to the other owner after your death.
Jointly Owned Property
If you are not married and own property with another, you own the property based on your agreement with the other owner(s). You may pay taxes based on your amount of legal ownership, and you may pay your monthly loan payment based on the amount of your legal ownership. If you have a right-of-survivorship clause, the property passes on to the other owner(s) after one owner’s death.
Inheriting When Married
When you sign your deed, it is a good time to look at whether you want to own with your spouse as a joint tenancy with the right of survivorship. This means that if one of you passes away, the surviving spouse inherits the property.
When you sign to change your deed, you can include a written agreement that you share the right of survivorship. You can include this with your deed paperwork as a supplemental agreement.
Inheriting a house can be a great opportunity to build your net worth and improve your living situation. However, in order to reap the full benefits of this inheritance, you’ll need to put the home in your name. Talk with an experienced real estate attorney to ensure the process goes as smoothly as possible for you!
We Can Help
At Jarrett Law, our real estate attorneys work with heirs so you can see your options when inheriting property. We can help you through the entire process and ensure that all of your documents are correct.
We hope this helps you understand what it takes to inherit property in Texas so that you can feel confident when taking ownership of your inherited home. Good luck with your new home ownership! We are here to help you throughout the process. Please reach out to learn more about how we can help you!