A common question that comes up among listing agents is who owns the property (and thus who should sign the listing agreement) if one of the owners is deceased. Like most good legal questions, the answer is, “it depends”. The reason it depends is because it is at least a two-step analysis to get to the right answer. For simplicity’s sake, my discussion is going to only deal with the hypothetical where there are two owners and one of them dies.
The first step is to determine how the owners held tenancy to the property. If there was a right of survivorship, the surviving owner is now the sole owner of the property. The two types of tenancy with survivorship are called “joint tenants” and “tenants by the entirety”. Any two individuals can own property as joint tenants, but tenants by the entirety is reserved only for a husband and wife.
If property was held by either joint tenancy or tenancy by the entirety, your analysis is complete and the survivor owns the property outright – and thus can sign the listing agreement, the contract, and any settlement documents. It is not necessary to go through the probate process for the decedent or review a last will and testament because the tenancy “trumps” the probate process or last will and testament.
If the two owners held title to the property as tenants in common (or if there was only one owner), then we have to embark on step two of our analysis. Under this circumstance, the property is going to have to go through the probate process (there are always exceptions, like if the property was held in trust) and someone has to open the estate in the county where the individual died. In the probate process, it must be determined if the decedent died with or without a last will and testament (or “will”). If they died with a will they are said to have died “testate”, and if they died without a will they are said to have died “intestate”.
If the decedent died testate, then the language of the will is going to control who owns the property or who has the authority to sell the property. The will most likely does one of two things. It typically either gives the Executor of the estate the power to sell the property, in which case you would sign the listing agreement and contract with the executor of the estate. The other possibility is that the will gives the property directly to one or more individuals (“devisees”), in which case those individuals are the owners of the property and are the ones who sign the listing agreement and contract. (There are different procedures in Maryland and D.C. than in Virginia for effectively transferring the title into the names of the devisees).
The other possibility is that the decedent died intestate (without a will). In this situation, the state’s intestacy laws are going to determine who owns the property. A state’s intestacy laws typically take the form of a family tree when trying to determine who the beneficiaries are. For example, if a man dies without a will, his property will generally go to his surviving spouse under a state’s intestacy laws. If he is not survived by a spouse, the property will generally be divided equally amongst his surviving children, per stirpes.
The above is just a basic overview of the laws that govern how property is conveyed when someone dies. There are many exceptions and intricacies that can arise in the above analysis, and we always encourage you to consult an attorney at The Mason Law Firm, PLC prior to entering into a listing agreement or executing a contract.