A Death Without a Will: Who Owns the House and Who Can Sign

When somebody dies without a will, the house does not go to whoever is living in it, whoever paid the mortgage, or whoever the family agrees should have it. It goes to the people the state's intestacy law names, in the shares that law sets, and nobody can sign a deed until a court has said who those people are. This is general information, not legal advice; the specifics are set by the law of the state where the property is.

Who inherits, in plain words

Every state has a list. The details differ, but the shape is the same:

• A surviving spouse takes all or most of the estate. Where there are children from another relationship, many states split it between the spouse and those children.
• Children take equal shares if there is no spouse, and a deceased child's share usually passes to that child's own children.
• Parents, then siblings, then more distant relatives follow, in that order, only if nobody above them survives.
• Unmarried partners, stepchildren who were never adopted, and friends get nothing under intestacy, however long they lived in the house or how clear the deceased's wishes were.

That last point is where families are most often blindsided. A partner of thirty years can find the house belongs to an estranged adult child.

First check whether the house is even in the estate

Some property passes outside probate regardless of a will. If the house was held in joint tenancy with right of survivorship, or as tenants by the entirety between spouses, it passed to the survivor at the moment of death and a death certificate plus an affidavit is usually all the title company needs. If it was in a living trust, the trustee can sell. If a transfer-on-death or beneficiary deed was recorded, the named person owns it. Only a house held in the deceased's sole name, or as a tenant in common, goes through intestate probate.

Who can sign

Nobody, until the court appoints an administrator (the intestate equivalent of an executor) and issues letters of administration. The administrator, not the heirs, has authority to sell, and in many states must get the court's permission or the heirs' written consent before doing so. An heir who signs a purchase contract before the letters are issued has signed something they cannot deliver, and a cash buyer who takes that contract seriously is not a cash buyer you want.

Who gets appointed is set by a priority list, usually the spouse, then children, then others, and the court prefers somebody the other heirs agree on. Disagreement over who administers is the most common cause of a year's delay.

Small-estate shortcuts

Most states have a simplified procedure for estates below a threshold, and several allow an affidavit of heirship for real estate in some circumstances: the heirs sign a sworn statement of who the heirs are, it is recorded, and after a waiting period title companies will insure a sale. Whether a house qualifies depends on the state and on its value, and the thresholds are low in some states and generous in others. Ask a probate attorney in the first week whether any shortcut applies, because the difference is months.

The mistakes that freeze a sale

1. Doing nothing. Probate does not start itself. Every month without an administrator is a month of taxes, insurance and deterioration with nobody authorised to deal with them.
2. Letting the insurance lapse. Tell the insurer about the death and the vacancy. A claim on an empty house whose named insured is dead is a bad conversation.
3. Paying the mortgage from the wrong pocket. An heir who keeps paying the mortgage personally is usually entitled to be reimbursed by the estate, but only if it is documented. Keep every receipt.
4. Missing an heir. A child from a first marriage, a half-sibling nobody mentioned. An heir left out can reopen the estate years later, and a title company will not insure a sale where the heirs are uncertain.
5. Distributing before debts are paid. Creditors get paid before heirs. An administrator who hands out proceeds early can be personally liable.

Selling during administration

Once letters are issued, the administrator can usually accept an offer subject to court approval, and in states with independent administration can simply sell. A cash buyer who deals in estates will contract now and close when the court permits, which spends the waiting time usefully. The estate pays the selling costs, clears the mortgage and any liens, pays the creditors and the court, and distributes what remains according to the intestacy shares. Most of what is in selling a house in probate applies from this point, and the tax position is the one in selling an inherited house: the heirs' basis is stepped up to the date-of-death value, so the sale itself usually produces little or no capital gains tax.