I Inherited Real Estate – Where’s My Deed?
I often have clients ask about "getting a deed" when they inherit real property. My response is usually "you don’t need one." In North Carolina, in most cases, no deed is necessary to transfer and evidence ownership of inherited real estate.
North Carolina law provides that "[t]he title to real property of a decedent is vested in his heirs as of the time of his death; but the title to real property of a decedent devised under a valid probated will becomes vested in the devisees and shall relate back to the decedent’s death, subject to the provisions of G.S. 31-39." North Carolina General Statutes Section 28A-15-2(b).
What this means is that (1) if someone dies without a will, his or her next of kin (as determined under NC law) immediately own the property; and (2) if someone does will a valid will, the beneficiaries of the property under the will immediately own the property. In both cases, the administrator or executor of the estate can sell the property only if necessary to pay debts and expenses. An exception is if the property is devised to the executor of the will with instructions to sell the property.
Other than a sale necessary to pay debts and expenses, once the real property is vested in the heirs or beneficiaries, it can only be sold if all of the new owners and their spouses agree. If the parties cannot agree on the sale, or if one of the owners or spouses is unavailable, a court proceeding for partition or sale in lieu of partition must be filed. This is a long and expensive process. If a minor child becomes the owner of real property, it also cannot be sold without a court order.
Since deeds are not necessary under North Carolina law, the evidence of ownership for inherited real property is (1) the death certificate and (2) the probate file (with the will, if any). If the real property is located in a county other than the county of the decedent’s residence, these documents must also be filed in the county in which the real property is located.
Because of the complications involved under this system, often the best way to transfer real estate is with a living trust. A living trust generally gives the trustee the power to sell and avoids many of the problems inherent under NC law. This is particularly true for residents of other states who own property in North Carolina.