"Real" Property of a North Carolina Resident / Decedent ~ Really!

Real Property ~ Really

Real property in the legal world that refers generally to land.  And, if a structure is on that land, then the structure is typically included as part of the real property.  This is why real estate attorneys are sometimes referred to as dirt lawyers, which is neither meant to be disrespectful, nor is it typically taken by real estate attorneys as disrespectful.  Tangible personal property such as chairs, desks, automobiles and pictures is not real property in the legal world. However, in the "real world," chairs, desks, automobiles and pictures are real. Therefore, giving words their plain meaning, real property should be called " a piece of the surface of a planet including structures, if any, thereupon."  For simplicity sake, I will use the standard nomenclature of "real property" and assume my point has been made.

Three Main Methods

Like other property of a decedent, there are three main hierarchical levels with which property passes at the death of a North Carolina resident:

  1. by survivorship;
  2. by beneficiary designation; and
  3. through Probate

In North Carolina, when a married couple purchases real property and the deed that conveys title merely names the couple as grantees on the deed with no additional language, title to the real property is not held by either of the spouses, but rather by a newly created entity known as a tenancy by the entireties ("TBE"). This is a form of survivorship property wherein the title to real property automatically vests in the surviving spouse by operation of law when one of the spouses dies regardless of what the decedent spouse's Last Will might state. Deeds naming married couples as grantees usually identify the grantees as "Spouse 1 and wife, Spouse 2" in order to provide information on the marital status of the grantees at the time of the title conveyance to title searchers at a later date, which helps determine the chain of title when real property is later conveyed by sale.  Also, since TBE is a separate entity, the real property is protected from creditors of the spouses while both are living.  As of 1991, non-spouse grantees can also take title to real property with the survivorship attribute with specific language in the deed expressly identifying jointly owned property with rights of survivorship, but it is not likely that this non-spouse ownership will provide protection from creditors like TBE property does.

With regard to transfer or real property by beneficiary designation, as of the date of this writing, North Carolina (unlike some other states) does not allow real property to transfer through a beneficiary designation - transfer on death deeds.

Finally, real property will transfer either by gifting language in the decedent's Last Will effective when the Will is probated, or by the intestate succession laws of the State where the real property is located effective as of the date of death (which can be a challenge when the heirs are unknown or not located.  

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