Today's topic, ready, here we go.
Today's topic is a good one.
Today's topic is, death in real estate.
Now hold on a minute, it's not what you think it is.
It's not death in the property.
It's what do we do with ownership of a property when somebody dies.
Meaning I own this house, I die, what happens to my property.
Who gets possession of the property.
Who gets to own the property now that I am gone.
Now that's a pretty interesting topic.
It can be complicating.
We'll try to make it, yes.
We're going to try to make it as simple as possible.
Got it?
Okay, here we go.
Let's pump the brakes here and back up a little bit.
Got it?
Hugely important to make sure you've got a deed.
Now a deed is ownership papers to a house.
Let's pretend it's a pink slip to a car.
All right?
The deed is the ownership papers to a house.
Got it?
Now when somebody buys a house, all right, they're giving what's called a vesting form.
And they must fill this out stating, claiming, hey, I want to take the title to this house.
I want this deed to have my name on it.
Or my name and my wife.
Or my name and my brother.
No matter what it is, this vesting form, you are going to place the name of the people
are going to go on the deed.
You with me?
Called the vesting form.
Now that's happening during the escrow process.
Got it?
Good.
Done.
Then we close the deal.
This house is now recorded with the county recorder's office.
Based on what you gave them here.
Remember?
The vesting form.
So now the deed is created, and it's got your name on it.
Now this is the crucial part.
How are you taking title to this deed?
How is this deed set up?
Did you take it, ready here goes.
Did you take it sole ownership as one individuaL?
Or did you take it as joint ownership?
Now that's the part that's huge.
That's the part that's important and as to what you put on this deed.
This deed, especially how you're taking ownership, will determine what happens to this house
when the person, when the owner dies.
Got it?
Good, now let's go here.
Let's just go a little deeper.
Let's talk about joint ownership.
There's a particular stipulation in joint ownership that's called, ready?
Wait for it.
That's called right of survivorship.
Stick with me, we're going with joint ownership now.
Joint of course meaning two people or more involve din this ownership.
Right of survivorship.
Let's throw that in the mix.
Right of survivorship.
Now look at that word there, those words.
Right of survivorship.
You see here in the state of California it's very simple.
Here in the state of California, just so you know, whenever a husband or wife or husband
and husband or wife and wife, whenever people are married, each one gets 50 50 claim of
the property.
Got that?
50 50 claim of the property, not a big deal.
But what happens when somebody dies?
We have to be prepared.
They have to be prepared, right?
So this document, the deed, if it states on there joint ownership with right of survivorship,
just like the words say.
If one of the owners dies, immediately their 50 percent goes to the one that surviving.
The surviving one gets to claim the entire 100 percent now.
You with me?
They're married?
50 50.
Whichever one dies, if this one passes away, their ownership portion transfers over to
the surviving spouse.
Right of survivorship, you with me?
That's easy, that's simple.
By having that joint ownership right of survivorship, what does that do?
It avoids probate.
Now let's talk about probate for a minute.
What the hell is probate?
Probate, are you kidding me?
The word probate gives me a headache.
Probate means the courts have to get involved.
And that's the last thing we want to do when it comes to ownership.
And death.
Once somebody dies, the last anybody wants to do is take this property and the ownership
rights to this property to court.
Now why doesn't anybody wants this to go to court?
Wouldn't you want, for example, if somebody dies who owns this house, wouldn't you want
it to be executed rather quickly?
You would want to be able to transfer this house to the new owners immediately.
Whether it's heirs or children or family members.
Whoever that the owner who passed away wanted to, their will, their intent.
They want it to go to this person.
You want it to happen immediately.
But if you don't have the proper documentation intact and in place, it goes to probate.
It'll be up to the court to decide well who has the right to this property now.
Are you kidding me?
You know what happens when that occurs?
You know what happens?
That can take time.
That can take so much ... In some case it can take up to a year for the courts to decide
who has the right to it.
It can take up to a year for just for the court to approve this will.
It can take up to a year for a court to have a representative tackle and be responsible
for this situation.
It can be a major headache, probate.
If I were you, the best thing to do is to avoid probate.
How can we avoid probate?
Very simple.
Have the right documentation.
Have the right contracts in place.
What does that mean?
It means have either a will or a trust in place.
Stick with me.
Have either a will or a trust in place.
But they are different.
You have somebody that owns this house.
They're still alive, and they're still healthy.
Best thing to do would be for them to create a living trust.
Think about this, it's a living trust.
But this is crucial in how it's done, how it's executed.
Living trust, got it?
Documentation say okay, this is the deal.
I'm the owner of this house.
And this is what I want to happen when I'm gone.
When I die.
And what they do is on this living trust, first things first.
First thing they do is they going to place themselves as the trustee.
'Cause they're still alive.
So they're going to be the trustee.
Still handling this trust.
In this trust, they're going to have somebody that's going to be in charge of the trust
when they die.
That's going to be called the successor to the trustee.
You got it?
You got the trustee who's the one still alive.
And the successor trustee.
The one that's going to take over once this person dies.
And what's going to happen then is this.
Once this owner does pass away, and the successor trustee takes over.
Then of course they're going to do what?
They're going to execute every single stipulation that this trust has listed there.
Makes sense, doesn't it?
Now why is that, in my opinion, a lot simpler and a lot more beneficial than a will?
Well here's the difference between a will and a trust.
Is there a major difference?
Well there is.
You see a will will still have to go to probate.
And we just discussed it.
Probate can be complicating.
A trust isn't.
A trust doesn't need probate.
When you have somebody taking the property as joint tenants with remember the other term?
Right of survivorship.
No probate.
That's understood.
By law it's understood.
That being said, the best thing to do to prepare yourself for death and the ownership of property.
The aftermath would be that you have a trust in order.
Or of course to take your property, if you have somebody with you.
Joint ownership with right of survivorship.
I know it gets complicating, but it's always best to be prepared.
Again if you don't have these items in place, you're going to head straight to probate court.
And there going to have people fighting for this property.
You're going to have people arguing, have people saying well I own this, I own that,
I want this, I want that.
They left this to me, they left ... It's always best to have things what?
Yeah, in order.
Hope this helps you.
Most important thing, let's review this real quick.
Two ways to own property: sole ownership or joint ownership with somebody else.
Community property.
Got it?
Good.
Next thing on that is you can have a living trust or you can have a will.
They're both great, but of course the will, you may still have to go to probate.
A living trust you don't because all the terms have been executed there.
And they're saying this is what I want out of my property.
Divide my property up this way.
With the living trust.
Great so we learned something today.
It's confusing, how is this going to affect you as a real estate agent?
It probably won't but it's great to know this terminology.
It really is.
That way you know, if you have a client who wants to sell their house.
The first thing to do is going to go to the title report and check the deed and see how
they own the property.
Because mind you the only ones that can sell a property are those who are on the deed.
You with me?
This is why it's important for us realtors to know who si on the deed.
Because whoever's on the deed, don't forget.
The ones that put their names on there via the vesting form, remember that?
They're the ones who have to sign the listing agreement.
This is what we want to know as realtors.