Estate Planning Options

I am married but own a home in my name alone. What are my estate planning options?

By Attorney Paul Hanks, Ironclad Living Trusts in California

There are times when only one spouse is named on the deed as the owner of a home. The need for a living trust is compelling when only one spouse is on title to a home. There are two main reasons why a home may be titled in the name of one spouse alone. One such scenario is that one spouse already owned the home before they became married. A second common situation is that the spouses decided to take title to a home in the name of one spouse alone to benefit from that spouse’s superior credit history to obtain a better home loan.

Many of my clients are surprised to learn that the one spouse on the deed to the home can also create their own separate property trust. Within that trust is a beneficiary section which precisely states how the home is to pass upon the trust creator’s death.

There is an alternative estate planning option that exists when only one spouse is on the deed to the family home. The spouse who is named on the deed can actually execute a new deed adding the other spouse to title. A potential downside to this approach involves any existing home loan on the property. If only one spouse is on title to the home, most likely it is that spouse alone who qualified for the home loan. If that spouse who qualified for the home loan adds the other spouse to title it could jeopardize the home loan. The lender may insist that the spouse added to title qualify of their own credit worthiness to be on the home loan.

For these reasons the lender should be contacted before a spouse is added to the deed for the home. It would be wise to obtain the lender’s written assurance that they will not disturb the home loan in any way if a spouse is added to title. If the lender does provide the written assurance that adding a spouse to title will not risk the home loan, then a new deed can be executed to reflect title to the home in the names of both spouses.

Once that deed is recorded both spouses are now joint owners of the home. As joint marital owners of the home this couple can now create a joint marital living trust.

There is additional complexity to estate planning when only one spouse is listed on the deed to the couple’s home. There is also often risk when a new deed is recorded. If you are confronted with the situation where only one spouse is named on title to your home, it would be prudent to seek professional advice before doing so.

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