The Importance of Wills in Real Estate: What Happens to Your Home When You Die?

For most people, their home is one of their largest assets. Yet many homeowners don’t have a plan for what will happen to their property when they pass away. When real estate is involved, having a will in place can make a difficult time much easier for your family.

What Is a Will?

A will is a legal document that outlines how your assets should be handled and distributed after your death. It names the executor, who is responsible for carrying out the will according to the deceased’s wishes, as well as the beneficiaries who will receive the property outlined in the will. A will generally takes effect upon the testator’s death. A testator is the person who made the will.

How a Will Transfers Real Estate

When you have a valid will, property in your estate is distributed according to the terms of the will upon your death. If you leave a general bequest, then the beneficiaries may take equally, depending on the terms of the will. However, a testator can leave a specific bequest of real estate to a named beneficiary if the testator so chooses.

The testator should consider whether leaving real property to multiple beneficiaries equally could result in a difficult situation.

For example, one child may live in the home at the time of the testator’s death, while another child may live in another state. The child living in the home may want to keep it, whereas the out-of-state child may want to sell it. The testator could leave a specific bequest of the home to one child and a specific bequest of money of equivalent value to the other child.

Another option is for the testator to give the executor the authority to sell the real property and divide the proceeds according to the testator’s wishes. This option can help alleviate disagreements between beneficiaries who may have different goals for the home.

A common pitfall in will preparation is leaving everything equally to multiple children without considering how that arrangement will work in practice. Upon the testator’s death, real property may be owned as tenants in common, with multiple beneficiaries taking an interest in the property under the will. The more beneficiaries there are, the more personalities and competing interests can affect the ultimate disposition of the property, potentially leading to costly disputes or litigation.

What Happens If You Don’t Have a Will?

If someone dies in North Carolina without a will, their property passes according to the laws of intestate succession. Intestate succession is essentially the state’s default inheritance plan. If you die without a will, North Carolina law determines who inherits property that would otherwise have been distributed according to your estate plan. Who inherits depends on which family members survive you. For example, your spouse, children, parents, siblings, or other relatives could end up owning an interest in real property through your estate.

Estate planning can be a complicated process, especially without legal counsel. You want to protect what you have worked hard to earn over the years and ensure that your property is passed to the right beneficiaries. This is why it is so important to consult with an estate planning attorney to help ensure your wishes are properly carried out when preparing a will.