people ask a family member who has good credit to participate on a loan to
purchase a home.  The family member’s
name is added to title (ownership) even though they may pay little or nothing
towards either the home’s original purchase price or its on-going mortgage, tax
and maintenance payments of the residence.
What happens to ownership of the residence when the relative dies while
still on title?



            Hopefully, the relative’s estate planning
leaves the property to the person(s) who really purchased the home, either by a
written will or a living trust into which the partial ownership interest was
transferred.  But what if the relative
did not get around to taking care of this important detail? 



that case a very nasty legal dispute may erupt when the decedent’s heirs or
beneficiaries under a will or trust, as relevant, seek to include the
decedent’s partial ownership interest as part of the decedent’s estate, to the
benefit of people who paid nothing towards the house.  That is more likely to happen when animosity,
distrust or dissatisfaction exists amongst the surviving family members.



          This unfortunate
scenario happened to a client of mine when her mother died, without a will, still
“owning” a one-third undivided interest in my client and her husband’s
residence.  The other daughter probated
their mother’s intestate estate, which otherwise did not require a probate (as
it was appraised at under $150,000), and sought to include the mother’s partial
ownership in the residence as an estate asset, to be divided amongst three
different heirs.  



through her deposition and documentary evidence, my client proved that her
mother only participated on title at the lender’s request; not because she paid
any of the associated purchase and ownership costs. Both the true intentions of
the parties to the loan and the equities (justice) of the situation demanded
that the residence be removed from the mother’s estate.  The question was finding a legal theory to
support that common sense result.



the Anglo-American common law doctrine that fairness and justice prevail, provides
that a “resulting trust” may be established by court order where necessary to
give effect to the true intentions and equity of the situation.  A resulting trust means that the person whose
name is nominally on title, in this case the deceased mother, is only there
because of some underlying agreement that requires title to be transferred
elsewhere.  Here, the agreement required
to be given effect was for the administrator of the deceased mother’s estate to
transfer title to the other daughter and her husband, the true and rightful owners
of the residence. 



of this legal aggravation and expense could have been avoided if the mother had
executed a will bequeathing her one third interest as she intended. 









“Serving Lake and Mendocino Counties for nineteen years, the Law Office of Dennis Fordham focuses on legacy and estate planning, trust and probate administration, and special needs planning. We are here for you. 870 South Main Street Lakeport, California 95453-4801. Phone: 707-263-3235.”