What Happens to Your Property if You Don’t Have a Will?

Wooden house with background nature - property when there is no will concept
Having a last will and testament in place ensures your property will be distributed in accordance with your wishes when you pass away. However, you might be wondering what happens to property when there is no will. In cases where a person did not leave behind a will or any estate planning documents, state law will dictate the outcome.

How Does Property Transfer After Death if There is No Will?

If you pass away without a will, it is referred to as “dying intestate.” This means that you did not leave any enforceable legal instructions for what should happen to your property when you pass away. In these cases, the probate court will determine what happens to your property. Under Oregon intestate law, what happens to property when there is no will left behind depends upon who your survivors are. For example, if you pass away and leave behind:
  • Children but no spouse — your children would inherit all of your intestate property
  • Spouse but no descendants — your spouse inherits everything
  • Spouse and descendants from you and that spouse — your spouse inherits all your property
  • Spouse and one or more descendants from you and someone other than your spouse — your spouse would inherit half of your intestate property and descendants inherit everything else
  • Parents but no spouse or descendants — your parents inherit everything
  • Siblings but no spouse, descendants, or parents — your siblings inherit all your intestate property
Once the judge decides how property should be transferred after death, there are certain procedures and formalities that must be followed. Depending on the property, a new title may need to be issued for property in order to pass to a subsequent owner.

What Happens to the House When the Owner Passes Away?

A house cannot remain in a deceased person’s name. Ownership must be transferred according to the terms of their last will and testament — or by intestate law. After the new owner has been determined, that individual must file a new deed with the county recorder’s office. Doing so will usually require a copy of the death certificate and a statement from the probate court. Transferring ownership is meant to ensure the new property owner pays their property taxes and utility bills. If the property was owned jointly, the house will typically pass to the surviving owner. In the event the owner of a house passes away with no heirs, the probate court will identify the closest family member who is still living. If there are no surviving relatives or a will to dictate property distribution, the property would go to the state.

How Can You Avoid Property Transfer in Probate?

Your property can be protected from probate — and distributed in accordance with your wishes — with a comprehensive estate plan. Although a last will and testament does not avoid probate, putting your property into a trust can. In addition, there are a number of other estate planning tools that can be used to help your family avoid going through the lengthy, costly, and public probate process. Specifically, property transfer in probate can be avoided by using the following legal tools:
  • Living trusts — Under Oregon law, a living trust can be used to avoid probate for nearly any asset you own. This includes real estate, vehicles, bank accounts, and more. To set up a living trust, you will need to create a trust document that names someone to take over as successor trustee after your passing. Then, you must transfer ownership of the assets to yourself as the trustee. Upon your passing, the successor trustee can transfer the property to the trust beneficiaries while avoiding the need for probate proceedings.
  • Joint ownership — If you own property jointly with another person that includes a “right of survivorship,” the property automatically goes to the surviving owner upon the other’s passing. In Oregon, joint ownership can take the form of a joint tenancy or a tenancy by the entirety. However, a tenancy by the entirety can only be used for real estate belonging to married couples.
  • Payable-on-death designations — A payable-on-death designation can be used for bank accounts, savings accounts, and certificates of deposit. This allows you to continue to control the account during your lifetime and spend it in any way you wish. At the time of your passing, a beneficiary can claim the money directly from the bank without probate court proceedings.
  • Transfer-on-death registration for securities — Stocks, bonds, and brokerage accounts can be registered in transfer-on-death form. This eliminates the need for probate court proceedings and allows the beneficiary to deal with the brokerage company directly to transfer the account.
  • Transfer-on-death deeds — With a transfer-on-death deed, you sign and record the deed during your lifetime, but it only takes effect after your passing. The property can be sold at any time while you are alive. The beneficiary has no rights to the property until the time of your death.
The tools you use will depend upon the type of property and your goals. It’s a good idea to consult with an experienced estate planning attorney who can advise you which tools would be best for your situation, based on your specific objectives.

Contact an Experienced Oregon Estate Planning Attorney

If you are concerned about what will happen to your property if you don’t have a will, a skillful attorney can guide you through the estate planning process. Based in Salem, Litowich Law provides clients throughout Oregon with knowledgeable counsel for a wide variety of trusts and estates matters. We welcome you to contact us to schedule a consultation to learn how we can help.
Categories: Estate Planning