Homeowners in New York should be aware of issues that can occur when purchasing or refinancing a home. Issues in the title of the home can potentially lead to probate disputes. The name on the title or the way in which the title is held can cause complications when a person listed on the title dies or becomes unable to make decisions.
There are two main scenarios in which this can occur. When a person buys a home and has poor credit, he or she will have someone, such as a family member, co-sign on the home. The co-signer is listed on the title of the home, even if he or she does not pay a penny toward the mortgage.
This can create problems if the co-signer becomes dies or becomes incapacitated. How can the co-signer make sound decisions regarding the refinance or sale of the home if he or she is incapacitated? Who gets the share of a home when the co-signer dies? Unless these situations are addressed in the co-signer's valid will, the issue of the home's title will likely turn into a court battle.
Another problem can occur when someone refinances a home. The title is temporarily taken out of the person's living trust. The lien is recorded in the person's name against the title. The title must then be recorded back into the person's living trust. If not, probate may occur, which is why it is important to double-check with the title company.
Many people try to avoid probate whenever possible, as it can sometimes take years for the estate to settle. The best way to avoid it is ensure that the property has the proper title and is mentioned in a valid will. If you have further questions, please don't hesitate to get in touch with a Long Island probate attorney at Adler Law!
Source: Lake County News, "Estate Planning: Homeownership traps in legacy planning," Dennis Fordham, Oct. 20, 2012