No Vesting, Big Problems: How to Avoid Property Deed Mistakes

Owning a home is one of the most significant investments most people make in their lives. Yet, countless homeowners inadvertently create legal issues by mishandling property deeds, often to save time or money. From incorrect filings to missing key legal details, these mistakes can lead to costly and complex probate proceedings after a property owner’s death. This blog will explain the importance of vesting in property deeds and provide real-world examples of the problems that can arise from improper vesting.

What is Vesting on a Deed?

Vesting refers to how the ownership of a property is held by two or more people. This critical detail defines what happens to the property after one of the owners passes away. The two most common forms of vesting are Joint Tenancy and Tenants in Common.

Joint Tenancy: In this arrangement, there is an automatic right of survivorship. This means when one owner dies, the surviving owner automatically becomes the 100% owner of the property.

Tenants in Common: Here, when one owner passes away, their share of the property remains within their estate, which could require probate court proceedings to determine how that share will be distributed.

Failing to specify the vesting type can lead to unnecessary legal complications. For instance, if a deed does not explicitly state whether it is Joint Tenancy or Tenants in Common, most states, including California, default to Tenants in Common. This default can result in a probate process even if the property was intended to pass seamlessly to a surviving owner

Learn more: Joint Tenants or Tenants in Common | What if the Deed Doesn't Specify?

The Consequences of No Vesting on a Deed

Failure to include vesting on a deed can have disastrous consequences for heirs. In one recent case handled by our office, a mother transferred her home into her daughter’s name, thinking this would make it easier for her daughter to inherit the property after her death. Unfortunately, the deed lacked any vesting language. When the mother passed away, the daughter was forced to go through probate to inherit the remaining 50% of the property. This issue was compounded by the fact that the mother had other children, meaning the daughter had to share the estate with her siblings, despite her intention to inherit the home in full.

In another case, a property that passed from grandfather to mother, and then from mother to daughter, was improperly handled at each step. None of these deeds included vesting language, resulting in multiple probates spanning several generations. Not only was this an expensive and time-consuming ordeal for the family, but it also led to property tax reassessments that further complicated the situation.

The Cost of “Do-It-Yourself” Deeds

Many homeowners attempt to save money by creating their own property deeds without the guidance of a lawyer. While this might seem like a cost-effective solution at the time, these DIY deeds often result in significant legal fees and headaches down the line. In most cases, improperly executed deeds lead to probate proceedings, which can take anywhere from 9 to 12 months, or longer if any issues arise.

Legal fees and delays aside, errors such as misspelled names or failing to remove deceased individuals from title can extend the probate process even further. A simple error can add three to four months to an already lengthy timeline and increase costs.

Learn more: The Complete Guide to Trust Funding: What You Need to Know

Avoid Costly Mistakes: Work with Professionals

The moral of the story is clear: don’t try to cut corners by creating your own deeds. The risk of error is too high, and the consequences can be financially devastating. Whether you are transferring property to a family member or planning your estate, it is crucial to work with a lawyer or title company to ensure the deed is properly executed.

For most families, the best course of action is to create a trust and transfer the property into it. This avoids the need for probate entirely. However, if you plan to add someone to the title of your home via a deed, make sure you consult with a legal professional first.

Avoid Probate and Protect Your Family

Improperly executed deeds can result in a legal quagmire, leading to expensive probate cases, family disputes, and unintended property distribution. Working with an experienced attorney is the best way to ensure your property is passed on according to your wishes without unnecessary delays or costs.

At Bethel Law, we have helped countless families navigate these complexities. If you have questions about property deeds, vesting, or estate planning, contact us today to schedule a consultation. Our team is here to guide you through every step of the process.

Learn more: The Essential Guide to Trust Administration After Death

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