DEATH AND REAL ESTATE

What effect does the death of an owner of real estate have on the title to real estate?

When a person who owns real estate passes away, depending on the manner on which the title to the real estate was held, a number of issues become necessary to address following such a person’s death. If the title is held as a joint tenant or as a tenant by the entirety, the title to the real estate passes automatically to the surviving joint tenant (tenants) or the surviving spouse. In a tenancy by the entirety situation, there is no need for the deceased person’s estate to be probated in order to pass title to the real estate to the survivor. However, if the title to the real estate is held as a tenant in common, then the deceased person’s interest in the real estate will pass in accordance with a devise under the Will (if the person dies leaving a will – which would then require that the Will be probated), or the deceased tenant in common’s interest will pass in accordance with laws of intestacy, which will also require the probating of the deceased person’s estate, in order to establish the decedent’s heirs-at-law to whom the real estate passes.

Also, upon the death of a person owning real estate, there is an automatic Massachusetts Estate Tax Lien and an automatic Federal Estate Tax Lien which is placed upon the property, to protect the Commonwealth of Massachusetts or the federal government getting its estate tax paid, if there is a Massachusetts or Federal Estate Tax due, resulting from the deceased person’s estate. The current (calendar year 2012) threshold amount of estate assets that would trigger a Massachusetts estate tax due is $1,000,000, and the current (calendar year 2012) threshold amount of estate assets that triggers a Federal Estate Tax due following the death is the amount of $5,125,000. Unless the decedent’s estate exceeds these thresholds, there generally is no need to file either a Massachusetts Estate Tax return or a Federal Estate Tax return; however, in both instances, there is a need to record an Affidavit/Certificate of No Estate Tax with the Registry of Deeds or Registry District of the Land Court, in which the decedent’s property is located, the effect of which Affidavit/Certificate will be to document that there is no Massachusetts Estate Tax Lien and no Federal Estate Tax Lien.

Where the real estate is held by a joint tenant or a spouse in a tenancy by the entirety situation, although the title of the deceased person’s interest in real estate passes automatically to the surviving spouse (in the instance of a tenancy by the entirety) or to the surviving joint tenant(s), in the instance of a joint tenancy, there is still a need to record in the Registry of Deeds or the Registry District of the Land Court, a certified copy of the decedent’s death certificate so as to document of record in the Registry and/or in the Registry District of the Land Court, the fact that the person has passed away. The death certificate is generally recorded at the same time that Affidavit/Certificate of No Estate Tax is recorded. When the real estate involved is registered land (also sometimes referred to as Land Court property), there may also be a need to record other documentation following a death in the chain of title, such as an Affidavit of No Divorce, and attested copies of certain probate related documents.

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