One of the local estate planning attorneys was telling me about a recent case he was involved in. In this case, it was a new widow. She and her husband lived in South Carolina and her husband, “Jim,” passed away two weeks ago. This was the second marriage for each of them and unfortunately, neither had a Last Will or other estate planning documents. But they did own a house, which was deeded to both of them. The loan, however, was just in his name. The Widow’s question was about whether she could continue to pay the mortgage without any problems.
Whether or not the bank lets the Widow continue with the mortgage may be the least of her problems. Here’s the big one: in South Carolina, when husband and wife own a house together, THERE IS NO AUTOMATIC TRANSFER OF OWNERSHIP TO THE SURVIVOR. In North Carolina, when husband and wife are on the deed, automatic survivorship is presumed. It is called “tenancy by the entireties.” This is clearly not so in South Carolina.
So the Widow now owns her one-half of the house, and part of Jim’s one-half, ALONG WITH HIS CHILDREN (whether his with her or otherwise). In this case, the children were from prior marriages. And any judgments against these children may also have attached to their share of her home. Even if the children are willing to deed their share to the Widow, judgments can be a problem.
Fortunately, if the children are willing, there is at least one technique a good estate administration attorney can employ that might salvage this situation for the Widow. But the legal fees for this extra work will probably be much greater than what a properly drafted Last Will would have cost. And the emotional strain of losing your husband and, potentially, your home, seems like the last straw. So the moral of the story: GET YOUR ESTATE PLANNING DOCUMENTS DONE!