Let’s say, for example, that Amanda’s grandmother left her home to Amanda’s mom, Caroline. Amanda and Caroline agreed that Amanda would benefit more from owning the home and raising her family there. As a result, Amanda gave Caroline $200,000 from funds she had inherited from her grandmother to buy the house.
Now Amanda has settled in, but there’s no legal proof that she actually owns the home. Since Caroline inherited the house, she may have received a new deed during probate, or property records may still list grandma as the owner. Either way, Amanda should confirm that Caroline has legal authority to transfer the property and then make sure it’s properly transferred into her own name.
So, what can Amanda and Caroline do to make sure Amanda is actually the formal legal owner?
Amanda needs to make sure the property is legally her mom’s to transfer
Before Amanda and Caroline jump into transferring ownership from Caroline to Amanda, the first key step is to make sure that a title search has been performed.
Unfortunately, just because the home was left to Caroline in the will doesn’t necessarily mean Caroline owns it free and clear and can just transfer it to Amanda.
“Many families think they can just do a deed transfer of family property from one relative to another. Having a deed prepared and giving a check to your relative is definitely the easiest route, but there can be big issues with this,” Lisa Hostetler Brown, a certified elder law attorney and founder of LawyerLisa, LLC, told Moneywise.
Brown explained that a title search is essential because the risks of not undergoing one are too great.
“Foregoing a title search means that no one verified who the owner is, what liens may be on the property, or if there are any issues with the property. It’s possible grandmother isn’t the legal owner of the property, or she may have taken out a reverse mortgage a few years back that no one knows about,” Brown said.
Since Brown warned that “issues found during a title search can be very expensive to fix,” a title search ideally should have been done before the $200,000 was transferred. However, Amanda should still contact a title company to get this done before she spends any more money or gets even more settled in the home.
Caroline needs to formally transfer ownership
If the title is clear and Caroline is currently the official legal owner, then Caroline just has to transfer the title of the property to Amanda.
