What to Know Before Signing for Property in a Deceased Parent’s Name in Wisconsin

This question comes to us from one of our users in Wisconsin:

My stepmother wants me to sign for some property that is still in my deceased Father's name.

Upon an individual’s death, there are very strict rules for how their property should be distributed, either by will if they validly executed a will during their lifetime or by a legal process called intestacy if they died without a valid executed will.

No individual should continue to sign over any property after an individual has died, regardless of whether they were their custodian or had a power of attorney and had the right to sign on their behalf prior to their death.

So long as the transfer of property is valid, there are a number of factors that should be considered before signing the property into your name. You should check to ensure that there are no outstanding mortgages, judicial liens, or mechanic’s liens against the property that could cause the property to be foreclosed upon and sold out from under you or could prevent the sale of the property.

You should also be aware that putting the property in your name makes you legally liable for all property taxes assessed against the property. Failure to pay those taxes can lead to significant fines or foreclosure, which can have a serious impact on your creditworthiness.

Transfer of a Deceased Individual’s Property

It is first important to note that after an individual dies, nobody is allowed to sign on their behalf. Even if someone served as a custodian or power of attorney, upon the individual's death, all activities signed on the deceased’s behalf should cease. Any such signatures after the individual's death will likely be found invalid and not legally binding.

Transfer or Property by Will or Other Means

After an individual passes away, the transfer of all their property should be handled either by will (if they executed a valid will during their lifetime), by intestacy, or by other means. If the deceased had a validly executed will, all property will be distributed according to it. An executor will be assigned, either by the deceased individual in the will or by the Courts, to handle the legal transfer of all property in accordance with the intentions specified by the deceased individual in their will.  

Some property can also be transferred by other means. If the property was placed in a trust prior to the individual’s death, the trustee will be responsible for distributing the property in accordance with the trust document. If property was owned in “joint tenancy with rights of survivorship, which means at least two individuals own property and when one of them dies, their share passes automatically to the survivor, then that ownership share will transfer automatically upon death.

Real property can be held by a transfer-on-death deed or beneficiary deed, which will automatically transfer on death. There are also methods of transferring property other than land and real property, such as life insurance policies, retirement accounts (401(k), IRA, etc.), transfer-on-death accounts for securities, pay-on-death bank accounts, and more.

Transfer of Property without a Will

Intestacy is what we call the formal system by which the Court will distribute a deceased individual’s estate to their “heirs”, which consist of spouses and family members. Heirs in probate generally inherit as follows:

• If they had children and no spouse, the children would inherit all their property.
• If they had a spouse and no children, their spouse would inherit all their property.
• If they had a spouse and children who are also all their spouse's children, their spouse will inherit all their property.
• If they had a spouse and at least one child or descendant with an individual other than their spouse, their spouse will inherit half of their separate property, and their children will inherit the deceased individual’s share of community property and half of all separate property.
• If they had no children or spouse, but had living parents, their parents would inherit all their property.
• If they had no children, spouse, or living parents, but had living siblings, their sibling will inherit all their property.

Beyond these, the process of determining heirs can get far more complicated. It should be noted that adopted children have the same rights to inheritance as biological children, but foster children and stepchildren who were not adopted by the deceased individual do not have rights to inheritance.

To distribute this property, the Wisconsin Courts will appoint someone to fill the role of executor and handle the distribution of this property. They will follow these rules for inheritance to distribute the deceased individual’s property.

Mortgage Liability

If someone else has an active mortgage on the property, and your name is not on the mortgage, you cannot be held liable for the outstanding balance of the mortgage. However, if the individual whose name is on the mortgage does not pay, the creditor may still be able to foreclose on the property for non-payment.

This would allow them to sell the property to repay the outstanding mortgage balance, totally depriving you of the property or any of its benefits. However, it should be noted that any such mortgage foreclosure would not have any impact on your credit, as you would not have actually been liable for the balance. However, you would still ultimately lose the property and all of its benefits.

Judicial Liens and Mechanic’s Liens

It is also important to check if there are any outstanding liens against the property. If the previous owner had any unpaid debts for which the creditor brought legal action to collect, and the creditor was successful, they may have received what is called a “lien.”

A lien is a legal encumbrance against a property that prevents the property from being sold until the debt is repaid. Further, the “lienholder,” who holds the lien, can bring an action under the lien to foreclose on the property and collect the outstanding balance.

Again, this will not affect your credit score, as you had no liability to pay this amount. However, it could lead to the loss of your property and prevent you from selling it.

It should also be noted that there could be a second type of lien against the property, which is called a “mechanic’s lien.” A mechanic’s lien is filed by someone who performed work on the property, such as construction, renovation, or landscaping, and was not paid for it.

They can then file a mechanic’s lien to encumber the property until they are repaid for their work. A mechanic’s lien will have the same legal effect as a judicial lien.

Tax Liability

The listed owner of a property will be liable for all property taxes assessed on the property. Whether or not another individual offers to pay property taxes for a given property, the individual listed as the owner will ultimately be liable for the unpaid amount if the other individual fails to pay the property taxes.

This can lead to severe penalties and consequences from the IRS and could result in a judicial lien against the property, ultimately leading to foreclosure and the sale of the property. Foreclosure of your property for a tax liability that you owe can have a serious negative impact on your credit report and ability to borrow in the future.

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Designed for general information use only. The content above does not constitute legal advice or the formation of an attorney/client relationship.