Estate PlanninG

​Do You Actually Own Your Home? (Untangling a Tangled Title)

You might be surprised to learn that you technically aren’t the owner of the home you live in.

If you have inherited your property but the deed hasn’t been transferred into your name, then technically under the law, you’re not the owner. This situation is called a “tangled title.” This can impact you in a number of ways - from harming generational wealth to contributing to fraud.

For many people, most of their wealth is attributed to their home. However, until a tangled title is resolved, you won’t be able to take full advantage of your home’s value. The process of untangling a tangled title is often a complicated legal process that will require a cost, but think about it: how much will not straightening out your title cost you in the long term?

How does a title get tangled?

To understand how a title gets tangled, we have to first understand a few simple real estate terms. A title is the legal right to ownership of a property. A deed is the legal document used to transfer property ownership from one person to another. A deed is an official written document, whereas a title merely refers to the concept of ownership rights. You can’t actually hold a property’s title in your hands.

When you purchase a home, a deed transfers the title of the home from the seller to you (the buyer). A deed also transfers homeownership to a person who inherits a home after a parent or other family member has passed away.

This is a common way titles get tangled - when a person whose name is on the deed passes away and a surviving relative continues living in the home without their name on the deed. For example, let’s say you were living with and caring for your aging mother. She passes away and you stay living in the home. You assume it’s yours - maybe her will even specifies that you inherit the home. But unfortunately, this isn’t enough. The home is not legally your property until your name is on the deed. Now, the title is tangled.

What are the consequences of a tangled title?

A tangled title can make life stressful. It places you in legal limbo, making it harder to do some things and impossible to do others. Tangled titles also create financial risks for people who live in a home without their name on the deed. Until you untangle a title, you may experience the following:

  • difficulty setting up utilities and obtaining homeowner’s insurance

  • inability to sell the property or take out a home equity loan

  • inability to qualify for financial assistance to fund repairs

  • inability to easily transfer the property to the next generation or a spouse

  • ineligibility to negotiate with a mortgage company or assert a tax payment plan, placing you at greater risk of foreclosure

  • risk of deed theft

  • risk to wealth building

The typical US household holds nearly 70% of its wealth in its primary residence - so this can be a serious issue.

How do I untangle a title?

Fixing a tangled title can be straightforward if the homeowner of record was the sole property owner, they left a will, and that will specifies who should inherit the property upon their death.

The deceased’s property goes through a court process known as probate. At the end of probate, a new deed is drafted and recorded, and the heir becomes the owner of record. But a number of factors can complicate this process, including lack of a will, multiple heirs with an ownership claim, intrafamily conflicts, and shared ownership of the property.

Probate can take a year or more, and there are a number of fees involved, such as administrative costs and attorney’s fees. A probate lawyer is not always required, but it may be in your best interest to get help from an attorney, especially if things get complicated.

Actual costs will vary depending on your situation. Because every property and every inheritance situation is different, we can help you figure out what makes the most sense for you.

A tangled title should be addressed promptly before a situation arises that further complicates things. We can also help you set up a will to ensure that title issues do not arise again once a property is in your name. Call Santaella Legal Group, serving San Ramon, Danville, Dublin, Pleasanton & the Tri-Valley area, at (925) 831-4840 to set up a consultation.