Dear Ms. Allison: I am my husband’s second wife. If my spouse dies and the house is in both of our names and I pay the mortgage on time, can I stay? My husband owned this house with his first wife, who passed 2014. He and I got married last month. Now he is putting my name on the house. If he passes, do I need to do anything but continue to pay the mortgage?
Second Wife in Tulsa, Oklahoma.
Dear Second Wife:
You are correct to question how property transfer works at a spouse’s death. Your husband can put you on the title (deed to the house).
- If it says you and he own it joint with rights of survivorship, it means the property is yours together. If he dies, you do have to file some papers at the courthouse, but no probate is needed. You are already an owner so you file the papers to change the title to you as the sole owner.
- If your husband puts your name on the title as tenants in common, then you only own an undivided 1/2 of the property. You own half and he owns half. If he dies, his half of the house must to probate before anyone can inherit, and if he has no will, whether you inherit the other half depends on his other relationships.
- If your husband does not put your name on the house, when he dies as its sole owner, it becomes part of his estate to be probated.
- There are other things he could consider that may avoid probate and reduce tax bills, but you both should see an estate planning lawyer to discuss your wisest options.
Now, the mortgage. As you guessed, the title to the deed does not change the fact that you will have to deal with the mortgage – a separate issue. You will either deal with it as yourself, a living person and homeowner, or as a debt to be paid by your deceased husband’s estate.
Generally, mortgages say that if a person who owes the mortgage (your husband) transfers the property that is subject to the mortgage, the mortgage becomes due and payable. That’s basically because the mortgage is a contract. Changing who is on the title is usually something that enables the note to be called as due and payable immediately.
If your husband dies having given you title to the house, you would be on the title (deed) but not on the mortgage. The bank can foreclose. Why? Because the person who agreed to pay the lender back is no longer living. The lender will not be ok with you just living there and informally promising to pay them on time. They want a legal agreement (the mortgage contract) to secure repayment from someone with something to lose if payment is not made.
So, what can you do?
- You, or you and your husband, can go and get your own refinancing, pay off the mortgage, and enter into a new mortgage; or
- You can approach the current lending company and see if they will let you join in the current mortgage. This used to be possible, but depends on the lender.
Blended families have inheritance issues. General information is only a guide. You need to seek an estate planning lawyer’s advice about setting your new family goals. She can then explain how to deal correctly with making them achievable under your family’s specific circumstances.
My best for your success,
Gale Allison, Attorney