What happens if I don’t change a deed after a parent dies?

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Q. In the situation of parents who transfer property to a child and the child’s spouse, and after a while, both parents pass away, what is the obligation or responsibility of the child and spouse in notifying the authorities — the county register of deeds and the city or township tax assessor — about the death, in order for the property tax records to properly show ownership of the property? And when this has not been done for more than three years after the death of the last surviving parent, are there consequences?
— Beneficiary

A. We’re sorry to hear about the loss of your parents.

The New Jersey Recording Act requires that deeds must be recorded, said Shirley Whitenack, an estate planning attorney with Schenck, Price, Smith & King in Florham Park.

She said the failure to record a deed will make it impossible to sell the property or obtain a mortgage or a line of credit. Plus, judgments or liens against the prior owners could attach to the property.

“The transfer should be exempt from New Jersey Realty Transfer fees because the conveyance was from a parent to a child,” Whitenack said. “However, if the parents were wrongfully or fraudulently receiving a tax credit or deduction on the residence on property they no longer owned, there could be serious consequences affecting the estate of the parents.”

It’s time to get the paperwork done.

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This story was originally published on July 26, 2021.

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