1% Won’t Avoid Probate
1% is so tiny, do we really have to go through probate for a tiny 1%? Yes, you do.
A fraction ownership is still ownership and the amount of probate work is still the same.
Some people use the 1% to ensure that one co-owner continues to have the right to live in the house until he or she dies. The small 1% percent doesn’t avoid probate as the owners intend.
After the 1% owner passes, the surviving owners might want to refinance the home loan or even sell the property. It’s then that they find they have to open a probate case to transfer the ownership to the heir of the 1% owner so they can take action with the home.
If you’re in a situation where you might be a co-owner and the idea of using 1% ownership comes up, there are alternatives. Using a “1% ownership” won’t avoid probate. Talk with the lawyer who prepares the deed about options to avoid probate.
– With a Joint Tenancy, when one owner dies, the property passes to the owners who are still alive, but the last owner takes the whole property.
– In a Tenants in Common ownership, each owner has a separate share that passes to her heirs or beneficiaries, not to the other owners. To avoid probate, that owner could use a Transfer on Death Deed to give her share to her beneficiaries at her death.
– A Life Estate gives an owner the right to live in the house until she dies. At her death the ownership passes to the “remaindermen”.
“I Got the House in the Divorce”
If the divorce decree has your spouse giving her or his share of the house to you, try to spend the money to prepare a deed so that you and your spouse sign the deed along with the decree.
It’s easiest to get cooperation to sign the deed when it’s signed along with the decree. If the deed is signed after the decree, some spouses refuse and that delay causes headaches because continuing joint ownership prevents finalizing the separation between the spouses.
If your ex-spouse won’t cooperate in signing the deed conveying the house to you, you need the court to sign the deed in place of the non-cooperating spouse. If you used a pro se divorce decree, that court template states that you file a motion for the court to order that the clerk sign in place of the non-cooperating spouse .
If your decree was drafted by a private attorney, usually the decree has a paragraph that authorizes the court clerk to sign in place of the non-cooperating spouse without a court motion having to be filed. This is much faster than the pro se provision.
Another consideration is which system your property is registered in at the Bureau of Conveyance. This makes a difference in the procedure you have to follow if a deed is signed after the decree is issued by the court.
The marital status of the parties to the deed has to be stated on the deed. The registration system makes a difference in the procedure you have to follow if a deed is signed after the court issues the decree because your marital status has changed.
Look at the Bureau of Conveyance stamp on the top of the first page of your deed. If the stamp is on the right side, the house is registered in the Regular System. To note the divorce and the change in marital status, you submit an affidavit to the Bureau of Conveyances along with the deed.
If the stamp is on the left side, the house is registered in the Land Court System. You need to file a petition with the Land Court to note the divorce. This takes several weeks to a few months to be reviewed and finalized with the Land Court. You need the Land Court Order noting the divorce before the Bureau of Conveyances will accept the deed.
You can avoid all these procedural extras and time makes it worthwhile to spend a little more to have the deed prepared so that it can be signed concurrently with the decree.
Transfer on Death Deed
If you’re the beneficiary designated on the Transfer on Death Deed, you need to take one more step to have the house turned over to you. If the house is registered in the Regular System, you need to submit an affidavit to the Bureau of Conveyances that the Transferor has passed.
If the house is registered in the Land Court System, you need to file a petition that the Transferor has passed and obtain a court order. Then you’ll file the order with the Bureau of Conveyances.
How Much Does It Cost?
Documents filed in the Regular System in the Bureau of Conveyance cost $41 each. That includes deeds, short form trusts, and affidavits. Documents filed in the Land Court System cost $36, and if the document changes the ownership, you have to pay an additional $50 for the issuance of a new certificate of title.
So for a deed, you’d pay $36 for the deed and the new certificate of title. But if you were recording a transfer on death deed, there’s no new certificate of title issued because the ownership doesn’t change until after you pass and you’d pay just $36.
What’s the P64B?
Don’t be intimidated by all the lines on the P64B that you’ll clip to the deed. The lawyer who drafted your deed will prepare this for you including checking the appropriate box. Usually you will simply sign on the bottom of the backside, above your email and phone number.
The P64B is a notice to the Tax Department that the ownership has changed. This document is required to accompany the deed so make sure you bring it with you when you record the deed. You won’t need a P64B if you are recording a Transfer on Death Deed because ownership won’t change with that deed, and the P64B will be turned in to the Bureau after you pass (see above).
We hope this answers some questions you may have about deeds.
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