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April 22, 2023, 4:32 p.m. EDT

‘I grew up an only child’: My father wants me to inherit the family home, but my late mother also had a son from her first marriage. Are we doing the right thing?

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By Quentin Fottrell

Dear Quentin,

My mother and father were married for almost 60 years, and my mother just passed away. I grew up an only child. I am my father’s only child; however, my mother was married before him and has a son who is my half-brother. She didn’t raise him, nor did she see him until he looked her up about 20 years ago. 

When my mother died, my father wanted to make sure I inherited their home, their savings and their personal property without it going through probate, ensuring nothing could be contested. This is what he did. He filed a transfer-on-death deed with the county recorder in our county in regards to the house. When he dies, the house will automatically go in my name. No probate needed.

He then went to the bank, and on his checking and savings he made the accounts TOD (transfer on death) to me. The only thing left is the furniture and personal contents of the house, which he left in his will to me. His wishes are that I inherit everything, and they were the wishes of my mother too. 

My half-brother is 10 years older than me and a very nice man. I’ve seen him maybe four or five times at most in the last 20 years and never before that. We really don’t stay in contact. My dad says the house will pass to me in a transfer-on-death deed, so it cannot be contested by my half-brother. Is that correct? Have we done the right thing? And are we overlooking anything?

Half-Sister and Daughter in Missouri

Dear Half-Sister,

A transfer-on-death deed means the house becomes yours after your father’s passing. It works in the same way as a beneficiary on a bank account or insurance policy. As you say, it also avoids probate — the public accounting of your father’s assets and liabilities — because the house transfers to you upon his death. It is an alternative to putting you on the deed today. This way, he maintains responsibility for and ownership of the property during his lifetime. 

If your mother had died intestate — without a will — your half-brother may have had a legal basis to make a claim on her estate as a legal heir. Under Missouri intestate law, a spouse inherits the first $20,000 of intestate property, plus half of the balance, and the children inherit the rest. However, assuming your parents owned their home under a joint tenancy agreement, your father would have become the sole owner of their house upon your mother’s death.

As MarketWatch columnist Howard Gold writes : “Joint tenancy with rights of survivorship (JTWROS) can be used for ownership of not only real estate but also checking, savings, fund and brokerage accounts. Under JTWROS, all ‘tenants’ have  equal ownership rights  and upon the death of one owner the property automatically passes on to the surviving tenants. Unlike the two other principal forms of ownership, JTWROS applies to non-married couples as well.”

Are you doing the right thing? It’s not a question of right or wrong. Your parents are entitled to leave their estate to one child. It’s their estate and their choice. Given that your mother did not raise her son, and he has a separate and successful life, it does not seem unreasonable that your father and late mother wanted you to inherit their entire estate, especially as your mother predeceased your father. Bottom line: Your half-brother is not a legal heir to your father’s estate.

Are you overlooking anything? That’s a question for your estate lawyer. A transfer-on-death or beneficiary deed needs to be notarized and filed in the county land records before your father’s death. Under Missouri law, you must outlive your father by 120 hours. The home is not considered a gift, so there are no gift taxes due. This kind of property transfer is also preferable to the complex and often expensive procedures involved in putting a property in a trust. 

The best part of your story is that you are in contact with your half-brother, and you have a cordial and mutually supportive relationship. I hope that continues for many years to come, and you and he build the kind of relationship that you might have had if you had been raised under the same roof. You would not always know it from reading this column, but there are more important things in life than money. 

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Also read:

‘I have committed financial infidelity’: I racked up $50,000 in debt to help my troubled son — and have not told my husband. How do I get out of this mess?

‘He pays half of the bills in the house, despite six adults living there’: My son lives with his dad and stepmom. They take advantage of him. How can I get him out?

‘I’m stuck in a penny-pincher mindset’: My spouse and I bought a home, but he only wants to buy high-end items. How can we agree?

Learn how to shake up your financial routine at the Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York. Join Carrie Schwab, president of the Charles Schwab Foundation.

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