A family recently came to me after their last living parent passed away. They brought the Trust, which specified that everything should be split equally among the three children. At first glance, the Trust Administration seemed straightforward. However, when I asked if they had the most current deed for the house, they did not. I ordered the deed and scheduled a follow-up meeting.
When the deed arrived, it revealed something unexpected: the title was in the names of Dad, Mom, and the Oldest Child as Joint Tenants. This meant that the house automatically went to the Oldest Child upon the parents’ passing. In cases like this, the deed—not the Trust—determines who inherits the house. Under Joint Tenancy, ownership transfers to the surviving joint tenants as each owner passes. In this case, when Dad died, ownership transferred to Mom and the Oldest Child. When Mom passed, the house became the sole property of the Oldest Child.
The Oldest Child was surprised by this outcome. They explained that they had been added to the title years ago to help their parents secure a new mortgage and had no idea it would result in them inheriting the house. They assumed the Trust would control how the house was divided. However, for the Trust to govern who inherits the house, the deed needed to list the property as owned by “Mom and Dad as Trustees of the Mom and Dad Living Trust.”
In my workshops, I often compare a Trust to a wagon: it controls the assets inside it. For a house to be “in the wagon,” its title must match the Trust. In this case, the joint tenancy title caused the house to pass outside of the Trust, and the other two siblings would have had no claim if the Oldest Child had wanted to keep the house.
Fortunately, the Oldest Child wanted to follow the parents’ wishes. We worked together to divide the estate equally as intended. However, this situation could have turned out very differently. If you want to ensure that your home and other assets are distributed as you wish, make sure your titles and deeds match your Trust. If you need help with this, give me a call.
