What Is a Probate Sale? What Happens When a Spouse Passes Away

What Happens to Your Home When a Spouse Dies?

After a spouse dies, there are a few different potential legal rules that will be executed depending on the type of ownership of the property as well as if the spouses are married or unmarried. Keep reading to learn all about these different types of inheritances.

Married Couples

If a couple is married and one of the spouses dies, you automatically inherit the property if they have a valid will. From here, you can either choose to take the property or to get an equalization payment. If your spouse did not have a will, you will likely still be able to choose to receive equalization or the property, but this depends on the state’s inheritance laws. In both situations, there are many legal steps that have to be taken to claim these payments.

Unmarried Couples

Unfortunately, common-law spouses do not inherit property and are not eligible for equalization payments unless it is left to them in a will. According to state law, since the person is not legally married, the property will go to the owner’s children or other relatives.

Joint Ownership

For both married and unmarried couples who co-own property, the surviving owner becomes the sole owner of the property and in any joint bank accounts.

Date of Death Appraisals

A date of death appraisal, or date of death valuation, is an important part of determining how much your spouse’s property is worth. If your spouse has passed away, you will likely be named as the estate administrator. Therefore, you have to provide the IRS and the court with the value of the home through the date of death appraisal

These appraisals don’t only include real estate, but a full analysis of all the deceased person’s possessions, including cash, valuable items, retirement accounts, savings accounts, investment accounts, insurance policies, and more. This inventory will determine the value of the property as well as if there are any taxes owed, if the assets are sufficient to pay the creditors, and how much of the assets can be distributed to the inheritors.

You might be wondering why it is called a “date of death” appraisal. While probate can be a lengthy process, the property officially belongs to the inheritors on the date of the owner’s death. Therefore, the court needs to know what the property is worth as close to that date as possible via the appraisal, usually within six months of the tax filing deadline.

Conclusion

While the probate process is the last thing you want to think about when grieving a spouse, there are many legal processes that you will need to go through soon after your spouse’s death, including a date of death appraisal.