Avoiding Common Estate Planning Mistakes for Married Homeowners with Real Estate

When my grandparents bought their home in the 1950s, it was uncommon for a married couple to own property jointly. At the time, married persons were generally considered to be a single economic unit, and sole ownership by the husband was the norm. Things have certainly changed since then, but I still regularly encounter couples who don’t own their property jointly. Sometimes it’s a matter of financing, sometimes it’s a second marriage, and sometimes it’s intentional asset protection. Whatever the reason, leaving your spouse off the deed may not have the effect you expect.

Spousal Elective Share In Rhode Island

In Rhode Island, as well as many other states, a surviving spouse has a right to a portion of your estate even if their name never appears on the deed. This is known as the spousal elective share, and it can produce results that surprise even the most careful planners.

Consider Edward, who owned his home for twenty years before marrying Lilah. Lilah owns a condo of her own, which she keeps and rents out after the marriage. Edward has children from a prior relationship and wants them to inherit his property when he dies. His will is straightforward: his children share his estate equally and they will inherit his house when he dies. Lilah isn’t mentioned.

When Edward passed away, however, Lilah inherited a life estate in his house–because the law provides for this by default. Even though his wishes were clearly stated in his will, Lilah asserted her rights as his surviving spouse. Therefore, she has the legal right to live there for the rest of her life. (A living trust would have prevented this) A life estate has real monetary value, which put Edward’s children in an uncomfortable position. They either had to buy Lilah out or wait until her death to take ownership of the property. That was not what Edward intended, and it created exactly the kind of family tension estate planning is supposed to prevent.

How Joint Tenancy Laws Work In Rhode Island

In Rhode Island, the most common way for married couples to own a home is as tenants by the entirety. This form of ownership is reserved exclusively for married couples and provides certain legal protections for each spouse. When the first spouse dies, the survivor inherits the property outright, without probate and without complication.

A joint tenancy with right of survivorship works similarly, with one key difference: it isn’t limited to married couples. Any group of people can hold title as joint tenants regardless of their relationship. When one owner dies, the remaining owners simply absorb the deceased’s share.

This can be a practical solution in a variety of situations. Take Brian and Catrina, who wanted to help their son David and his wife Elena buy their first home. Because financing was required, the lender needed Brian and Catrina to be on the loan and on the deed. Rather than let the ownership arrangement create complications down the road, they structured the title as a joint tenancy. That way, if something happens to any one of them, the others absorb that person’s interest automatically. No probate is required, and the transfer doesn’t trigger a due-on-sale clause in the mortgage.

How Tenants In Common Laws Work In Rhode Island

Tenants in common is a different arrangement altogether. Two or more people own the property together, but there are no survivorship rights. When one owner dies, their share passes to their heirs or beneficiaries rather than to the other owners. In Rhode Island, if a deed doesn’t specify the type of tenancy, tenants in common is the default, even when the owners are a married couple.

This structure is often the right choice when co-owners want their respective families to inherit their share of a property. Jane and her brother Jay purchased a lake house together so their families could share it for years to come. It wouldn’t be fair for one family to end up with the entire property just because their parent died first. So Jane and Jay purchased the property as tenants in common. When Jay passed away, his share went to his children, keeping his portion in his family while Jane retained hers. That’s exactly what they intended.

Don’t Rely on Google or AI to answer your questions

Sure, you can find answers to your legal questions on Google, but beware. Many of the responses, particularly the AI summaries, are based on generic information picked up from all over the internet. Every state has its own laws that pertain to estate planning and probate.

How your property is titled is one of the most consequential decisions in your estate plan, and it’s one that often gets made at closing without much thought. The right structure depends on your relationships, your goals, and who you want to inherit your share when you’re gone. Click below to schedule a call with me.