Ask Me Help Desk - NJ Real Estate Ownership

I live in NJ and married for 2.5 yrs now. We live with my mom-dad who currently own the house that all of us are in (total 4 adults living under one roof owned by my parents). As I said my parents own the house but when we signed the mortgage paperwork, our broker had said I am listed as a borrower so I can claim the real estate tax deduction on my taxes since I made the most amount of money annually so it made sense. I also have a sister who is married and lives separately with her husband nearby. My question is twofold:

1) My parents don’t have any type of will right now. What happens if something were to happen to either one of my parents or both of my parents? Who does the house belong to now? What % does state take away? How can I avoid paying any taxes and retain ownership of house? (by the way, I currently pay entire mortgage by myself even though my parents own it).

2) If we were to buy bigger house by using the proceeds of the current house and listing myself and my mother as 50/50 owner of this new house, do I automatically obtain 100% ownership if something happens to her? Or does her share go to my father’s way if something happens to my mother? What happens when both of my parents are no more, God forbid. Please advise. Thanks.

- NS

Your first question depends on the way in which your parents are listed on the deed. If they are listed as "John and Jane, husband and wife (or h/w)" then they own the house as joint tenants with the right of survivorship. This is the most common for married couples. If one of them dies then 100% of the ownership passes to the other one. If they both die then the property passes to their heirs according to the laws of intestacy. In NJ that would mean that you and your sister would each own 50%.

With regard to your second question, the only way that you would have 100% ownership of the house is if you and your mother own the property as "joint tenants with right of survivorship". You would have to make sure that the deed contains this specific language. If not then it will be presumed to be "tenants in common" which means that your mother's share would pass to her estate after she dies, rather than going to you. That would mean that you would own 50% and the other half would be owned by your father.

I suggest that you and your parents meet with an attorney to discuss the preparation of wills and deeds. An estate attorney would be best since they can probably advise you about taxes.

Quote:

Originally Posted by LisaB4657

Your first question depends on the way in which your parents are listed on the deed. If they are listed as "John and Jane, husband and wife (or h/w)" then they own the house as joint tenants with the right of survivorship. This is the most common for married couples. If one of them dies then 100% of the ownership passes to the other one. If they both die then the property passes to their heirs according to the laws of intestacy. In NJ that would mean that you and your sister would each own 50%.

With regard to your second question, the only way that you would have 100% ownership of the house is if you and your mother own the property as "joint tenants with right of survivorship". You would have to make sure that the deed contains this specific language. If not then it will be presumed to be "tenants in common" which means that your mother's share would pass to her estate after she dies, rather than going to you. That would mean that you would own 50% and the other half would be owned by your father.

I suggest that you and your parents meet with an attorney to discuss the preparation of wills and deeds. An estate attorney would be best since they can probably advise you about taxes.

THANKS LISA.

My pleasure! Good luck!

Regarding your question about taxes that may be owed - as long as the value of your parents' total estate is worth less than $2 million, there will be no estate taxes due upon their deaths. If their estate is worth more than that, they should seriously think about consulting an estate planner to help figure these issues out. At the very least they need a will - given that you are paying the mortgage, I doubt it's your parents' intent that their house would be split 50:50 between you and your sister, but that's what will happen if they don't have a will.