Dear Real Estate Adviser,
We live in Pennsylvania, and my hubby owns our home. The deed, title and loan are in his name only. If he dies without a will, what will happen to the house? Will I lose it, or do you think the lending institution will allow me to stay as long as I make the mortgage payments?
If there’s nothing in writing to designate who gets the property, then you would be bound by Pennsylvania’s somewhat convoluted “intestate succession” law. It mandates that a surviving spouse, in the absence of a will, is entitled to the entire estate if he or she is not survived by living children, stepchildren or parents. That is a big “if,” of course, since a majority of folks have someone who fits that bill. If your husband is not survived by “issue” (children, grandchildren or great-grandchildren) but is survived by a parent, then you’d be entitled to the first $30,000 of the estate plus at least half of the remaining balance. There are several other survivor contingencies. You can see how this could get complicated.
A word of advice: Avoid all of that. You both really need to put wills together along with power-of-attorney assignments. Why leave your fiscal fates to your state’s codes and probate? Assembling these documents will give you both peace of mind instead of worrying about things that haven’t occurred yet and a self-assurance that your shares of the property will pass to those you wish to receive it.
Typically, a spouse is not put on the deed for a variety of reasons including credit and debt issues or the other spouse’s longer-term contribution to the mortgage before marriage. There is no mention of your husband’s motivation here. But if he is worried about an equitable distribution based on your less-than-equal contribution, you could work out a joint-ownership agreement with rights of survivorship that explicitly states your individual contributions and percentage ownerships. Suggest to your husband you see an estate attorney or qualified family attorney to get this done along with those wills and powers of attorney. It is simply good risk management and would alleviate a major stress on the surviving spouse should the other one die.
As for the possibility of the lending institution calling the note upon your husband’s death: In the vast majority of cases, such a transfer will not trigger the due-on-sale clause, which lenders include in most loan documents to keep mortgages from being transferred to people with questionable credit risks. Similarly, transfer of a borrower’s house to a spouse as part of a dissolution of marriage generally doesn’t trigger the due-on-sale clause either.
That’s at least one less worry. Now lobby your hubby to get things in writing.
Ask the adviser
To ask a question of the Real Estate Adviser, go to the “Ask the Experts” page and select “Buying, selling a home” as the topic. Read more Real Estate Adviser columns and more stories about mortgages.