Avoid Probate

Deed of Trust

2012-05-14T09:51:00.000-04:00

A "Deed of Trust" is a legal instrument that grants a Lender a Security Interest in real estate. The Security Interest creates a lien on the property on behalf of the Lender and gives the Lender the right to foreclose on the property should the Grantor of the Deed of Trust fail to satisfy the terms of the loan. A Deed of Trust and a Mortgage are similar in the rights they grant the Lender.

A Deed of Trust involves at least three parties: the Grantor (Borrower), Lender and Trustee. The Deed of Trust transfers ownership of the property to the Trustee who holds the property "in Trust" for the Grantor until the Lender is paid in full. Should the Grantor fail to pay the debt as required under the terms of the Deed of Trust, the Trustee may foreclose on the property and distribute the loan proceeds to the Lender. Any excess amounts would belong to the Grantor. Once a Borrower has satisfied the terms of the Deed of Trust, the Lender must execute a Deed of Release reconveying the property to Grantor.

Deed of Release

2012-05-14T01:53:00.000-04:00

A Deed of Release (also known as a Deed of Reconveyance) is a legal instrument executed by a lien holder (Lender) to release a lien on real property. A Lender holding a lien on real property in the form of a Mortgage or Deed of Trust must execute a Deed of Release once the Lender has been paid in full by the Grantor of the Deed of Trust. In most states, Lenders are required to execute a Deed of Release within a certain time period after the loan is paid off.

A Deed of Release reconveys all rights granted to a trustee under a Deed of Trust back to the Grantor. Once the Grantor has repaid the Lender all amounts owed under a Deed of Trust, the Deed of Release is executed to clear the title from the Lender's lien.

How to Execute a Deed of Release or Reconveyance

Before the trustee of a Deed of Trust will execute a Deed of Release, the promissory note held by the Lender must be paid in full. Once the Note is paid in full, the Lender is required to execute a Deed of Release pursuant to the laws of the state where the property is located. The Deed of Release must:

(1) Contain a notation that the Promissory Note has been paid in full;

(2) Be in a form acceptable to all parties involved;

(2) Contain signatures of all parties involved;

(3) Be recorded by the Lender in the official public records in the county where the property is located;

The borrower should request a copy of the recorded Deed of Release and keep the copy for his or her records.

General Warranty Deed

2012-05-11T12:34:00.000-04:00

When a Grantor executes a "Special Deed" or "Special Warranty Deed," he or she is only warranting that they own the property and that no title defects arose during the time they owned the property. A Special Warranty Deed provides more protection than a quit claim deed, but less than a General Warranty Deed. A General Warranty Deed warrants title to the property from the beginning of time.

Why Use a Special Warranty Deed?

Special Warranty Deeds are most often used in Commercial Real Estate Transactions. This is so because often the owner of Commercial Real Estate is less intimately connected to the property and less willing to warrant against things that happened before they become owner of the property. Special Warranty Deeds can also be used to convey title to Residential Real Estate, but this is not usually how title is passed for residential property. Usually a General Warranty Deed is used when dealing with Residential Property.

What Has to be Included in both a Special and General Warranty Deed?

All Warranty Deeds must contain:
(1) a statement indicating that consideration has been given for the property;
(2) the Grantor and Grantee's names and addresses;
(3) the County where the property is located;
(4) a legal description of the property;
(5) signature of the Grantor;
(6) Notarization.

What Does a General Warranty Deed Promise the Grantee?

(1) That Grantor owns the property and can legally transfer title to Grantee (Seisin);
(2) That there are no liens against the property that have not already been disclosed to Grantee (No Encumbrances);
(3) That Grantor will defend Grantee against third-party claims to ownership (Quiet Enjoyment);
(4) That Grantor will deliver all documents required for marketable title (Further Assurance)

A Special Warranty Deed limits these promises to the time when the Grantor became owner of the property.

Why Use a Warranty Deed?

2012-04-17T14:24:00.001-04:00

A Warranty Deed is one of the most commonly used forms of conveying property in the United States today. The Warranty Deed is primarily used by "arms-length" parties (i.e. not friends or relatives) because it provides the buyer with certain assurances related to the seller's right to sell the property. A "Special Warranty Deed" assures the buyer that the seller has not done anything to the property while the seller owed it that would damage the title or marketablility of the property. The Special Warranty Deed does not warrant title to the property for anything that happened prior to seller owning the property.

A "General Warranty Deed" assures the buyer that title to the property is free and clear of liens from even before seller owned the property. In most instances, it would be better for the buyer to require a General Warranty Deed than a Special Warranty Deed simply because it provides more protection to the buyer.

Another common form of conveying property is the Quit Claim Deed. This type of conveyance is often used between family members because it simply tranfers one family member's ownership interest in a piece of property to another family member. There are no warranties as to the title or marketability of the property.

Other forms of conveying property include the Enhanced Life Estate Deed, Transfer on Death Deed, Life Estate Deed.

What is a Power of Attorney?

2012-04-11T09:52:00.002-04:00

A Power of Attorney or POA is a document granting one person written authority to legally act on behalf of someone else. POA's can be used in real estate transactions when one party (buyer or seller) cannot attend the closing. A third party can be given POA to sign the closing documents on behalf of the absent party.

POA's can also be drafted and executed in preparation for the future incapacitation of the party granting the POA. This type of POA is called a Durable Power of Attorney. Many people will execute a Durable POA prior to an upcoming major surgery or when they are concerned about the onset of Alzheimer's or other incapacitating disease. Durable POA's are often executed in conjunction with a Living Will.

A Power of Attorney can be either General or Limited. A General Power of Attorney grants permission for the agent to act on behalf of the principal in all matters in general. A Limited Power of Attorney grants permission for the agent to act on behalf of the principal in a defined matter or set of matters. Read my post on Agency for more information on the rights and responsibilites of an agent.

Life Estate Deed v. Enhanced Life Estate Deed

2012-04-10T09:31:00.000-04:00

I am often asked by clients whether the Life Estate Deed and the Enhanced Life Estate Deed work the same way when it comes to transferring and owning property. The simple answer to this question is: No. Although both deeds sound similar in name, each has its own unique benefits and limitations.

Life Estate Deed
For instance, when you execute a Life Estate Deed naming a "life tenant" and a "remainderman", both the "life tenant" and "remainderman" have a vested interest in the property at the time the deed is executed. The "life tenant" may use the property during his or her lifetime, but owes a duty to the "remainderman" not to dispose of or otherwise destroy the property. View my other post on the Life Estate Deed for more information on how it works.

Enhanced Life Estate Deed
Unlike the Life Estate Deed, the Enhanced Life Estate Deed does not grant a vested interest in the property to the "remainderman" at the time the deed is executed. The owner of the property may dispose of the property at any time without the consent of the "remanderman." View my other post on the Enhanced Life Estate Deed for more information on how it works.

Both deeds also contain certain similarities. The biggest similarity in the two deeds is that they are both designed to avoid probate by passing property to a remainderman without having to go through the court process.

What is an Agent?

2012-03-06T17:40:00.001-05:00

An agent is a person (or business) who is authorized to act on behalf of another person. A general agent is an agent who is authorized to conduct multiple transactions involving a continuity of service. For instance, a general agent might be someone who has guardianship or conservatorship of another person and is responsible for writing checks or making financial decisions for the ward.

A special agent is authorized to conduct a single transaction or a series of transactions not involving continuity of service. An agent who has been given a limited power of attorney for the purpose of closing a real estate transaction would be considered a special agent.

Master, Servant and Independent Contractor
Two types of agency relationships include the Master and the Servant. A Master is a principal who employes an agent to perform service in the Master's affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.

A Servant is an agent employed by a Master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the Master.

Another type of relationship is that of the Independent Contractor. An Independent Contractor is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. The Independent Contractor may or may not be an agent.

Tungsten Wedding Bands

2012-02-27T12:24:00.003-05:00

Tungsten Wedding Bands Lawsuit
In a recently filed court case involving the manufacture of tungsten wedding bands, jewelry manufacturer Quality Gold, Inc. is attempting to turn the tables on fellow jewelry designer Trent West. On December 19, 2011, QGI filed a declaratory action in the U.S. Southern District of Ohio asking the Court to either hold that a patent owned by West for the manufacture of tungsten rings is either invalid or that QGI is not in violation of the patent.

In filing suit, QGI appears to be firing back at West for continuing to send QGI "cease and desist" letters regarding QGI's manufacture of tungsten rings. It is not uncommon in the jewelry manufacturing business for one company to feel like another company is copying its designs. It is less common for the party accused of copying the design to file suit against the purported "victim." In this case, the dispute between QGI and West has taken place over several years and involves more than one patent.

Why all the Fuss over Tungsten?
Tungsten is one of the hardest materials used to make wedding bands. Once people discovered how difficult it is to scratch, it quickly became a popular substitute for gold, silver and other metals traditionally used for wedding bands. Other alternative materials include palladium and titanium. It is also possible to engrave tungsten bands with gold or silver to give it a different look.

Florida's Will Reformation Statute Turns Estate Planning Upside Down

2012-02-17T13:36:00.001-05:00

Florida's Will Reformation Statute Section 732.615

In 2011, the Florida Legislature revised its Probate Code to allow any interested person to reform a deceased person's Will even when the terms of the Will are unambiguous. In doing so, hundreds of years of Estate Planning Precedent has been turned upside down. The new Statute cuts against Florida's strict requirements for creating a valid Will and opens the door for abuse by disgruntled persons either left out of the Will or who want a larger portion of the Estate's assets. The exact language of the Statute is as follows:

732.615 Reformation to correct mistakes.—Upon application of any interested person, the court may reform the terms of a will, even if unambiguous, to conform the terms to the testator’s intent if it is proved by clear and convincing evidence that both the accomplishment of the testator’s intent and the terms of the will were affected by a mistake of fact or law, whether in expression or inducement. In determining the testator’s original intent, the court may consider evidence relevant to the testator’s intent even though the evidence contradicts an apparent plain meaning of the will.

One affect of this Will Reformation Statute has been to cause some to question whether executing a Will is the best way to leave property to their loved ones.

As a not-so-hypothetical example of the Statute's absurdity, suppose that as a husband and father I want to leave all of my property to my wife and children when I die. Not so hypothetical to most of my clients. Under the current Florida Statute, if I die intestate (without a Will) the Florida Probate Code requires distribution of my property to my wife and children in various proportions.

Now assume that instead of dying intestate, I die leaving a validly executed Will distributing my property to my wife and children in the same proportions as if I had died intestate. Under the new Will Reformation Statute, "any interested person" can now disrupt the probate process by filing suit for Reformation of my Will seeking a portion of my estate. That same person can now file the same lawsuit for any estate in Florida as long as the person can show he or she is an "interested person."

Success on the merits of such a lawsuit could depend on oral testimony of the person drafting the Will (i.e. "I wrote that down wrong, what the Testator really meant to say was..."), a letter written by the Testator in the heat of passion before or after execution of a Will, or he said/she said discussions from any number of interested parties. I know that each of these three examples are currently being used in Reformation Lawsuits currently pending in Florida courts.

To make matters worse, suppose a Will was probated thirty years ago with the provision that the corpus of a trust set up by the Will was only to be distributed upon the death of the trust beneficiary. The trust beneficiary then dies after the Reformation Statute has taken effect. According to at least one interpretation of the Reformation Statute, the distribution of the Trust corpus gives rise to a Will Reformation lawsuit over a Will probated thirty years ago.

On another note, there is a jaded part of me that wonders whether counseling my clients to execute a Will can open me up to a malpractice suit when the facts are as stated in my not-so-hypothetical hypothetical. The statute turns Wills and Trusts law upside down.

Special Warranty Deed

2012-02-17T12:03:00.002-05:00

Special Warranty Deed Protects Seller
What makes a Special Warranty Deed different from a General Warranty Deed? In short, a Special Warranty Deed adds a measure of protection for the seller that a General Warranty Deed does not. When you purchase property and the seller transfers title to you in the form of a Special Warranty Deed, the seller is esentially saying that he will guarantee (or warrant) that nothing has happened to cloud the title to the property while he has owned it. In other words, that he has not done anything that will give rise to a future mechanic's lien and nothing has happened on or regarding the property that might result in a judgment lien or lis pendens being filed against the property. This serves to limit the time frame for which the seller can be held liable.

General Warranty Deed Protects Buyer
A General Warranty Deed, on the other hand, guarantees (or warrants) that title to the property is clear from time immemorial. This provides an additional layer of security to the buyer. For instance, suppose the seller has owned the property for one month. Suppose also that the owner before him had hired a contractor to perform work on the property one month before selling it to the current owner, but failed to pay the contractor for the work performed. The contractor might still be entitled to file a construction lien on the property even though ownership of the property has changed hands. A General Warranty Deed would make the current owner liable for clearing up the mechanic's lien before selling the property while a Special Warranty Deed would not.

If you are the buyer, in most cases you would want to insist on a General Warranty Deed over a Special Warranty Deed.

As a general rule regarding title to property, the General Warranty Deed provides the Buyer more protection than a Special Warranty Deed, and a Special Warranty Deed provides the Buyer more protection than a Quit Claim Deed. For more information on how a Quit Claim Deed works, read my article on the difference between the Quit Claim Deed and the Warranty Deed.

DUI Charges

2012-02-10T18:08:00.000-05:00

DUI Charges
One of my clients was recently pulled over for drunk driving (DUI). He has to take prescription drugs which can dull his senses, but never drives during the prohibited time period after taking his medication. He happened to ask me some weeks ago while dealing with an estate planning issue what I thought he should do if he ever was pulled over for DUI. He thought it might be difficult to pass a drug test because his medication can linger in his system even after the "drunken" feeling has worn off. As it turns out, our conversation turned into reality when he was pulled over after crossing a double yellow line this past weekend. He had actually been on his cell phone and wasn't paying attention; not that I approve of either.

DUI Advice
During our conversation I gave him the following advice:

Do not answer any of the police officers questions. You don't have to be rude, but the officer is not your friend no matter how nice he may act towards you. They mean it when they say "Anything you say can AND WILL be used against you." The words "I'm sorry" can be interpreted in a court of law as an admission of guilt even if what you are sorry for has nothing to do with drunk driving.
Do not take the officer's field sobriety test. It can be difficult for even the most sober person to count backwards from 100, walk in a completely straight line (one false step can be viewed as evidence against you), or touch his or her nose with a fingertip in a way that satisfies the officer. This test is not even legally required in most states.
Do not take a breath test until you are arrested. If you have been arrested you are required to take a breath test and, in most states, if you refuse they can perform a blood test.

My client followed this advice to a T. In the end he was arrested but passed his breath test and is not facing charges for DUI.

DUI California

2012-02-09T21:45:00.001-05:00

California DUI Laws
California DUI Laws become more complex and difficult to mitigate the more offenses a person has committed. For instance, a first offense DUI may not require any more time in jail than the time spent upon arrest. The harshest penalties assessed as a result of a first offense DUI usually deal with monetary fines and a suspension of a person's drivers license. On the other hand, a second offense DUI requires the Court to give at least a four day jail sentence or work release. The fine is increased as is the time for suspension of drivers license.

A third offense DUI requires at least four months of jail time, house arrest or rehabilitation. DUI school will also likely be required in addition to the penalties faced under a second offense DUI. Each of the first three offenses is generally deemed a misdemeanor unless there are Enhanced DUI Penalties which merit a felony charge.

A fourth offense DUI in California usually brings felony charges with it. Penalties include a three year prison sentence and license being permanently revoked.

As a practical matter, you should always consult a DUI attorney if you are charged with DUI in any state. Most prosecuting attorneys would rather work with a DUI attorney they know than someone they don't. Most prosecuting attorneys are also overburdened with heavy caseloads and the opportunity to get a case off his or her desk without spending a ton of time on it is welcomed. DUI attorneys generally know this and can use it to a client's benefit.

What is a Quit Claim Deed?

2012-02-01T18:11:00.001-05:00

Quit Claim Deed
A Quit Claim Deed (sometimes misspelled "quick claim deed") is a legal document used to transfer one person's interest in a parcel of property to someone else. The Quit Claim Deed is often used between family members and friends because the transfer is made without any warranties or representations. Of particular note, the Quit Claim Deed does not warrant that title to the property is clear or that the person executing the deed is even an owner of the property. All the Quit Claim Deed does is transfer any interest the grantor has in the property to the grantee.

Warranty Deed
If you are purchasing a parcel of real estate and you want to ensure that title to the property is clear, you will need to execute another form of deed. A Warranty Deed requires the grantor to ensure that title to the property is clear. This includes the Special Warranty Deed. Read my other post for more information on the difference between the Warranty Deed and Quit Claim Deed.

Estate Planning: Lady Bird Deed

2011-11-03T11:49:00.004-04:00

The term "Lady Bird Deed" is a nickname given to the Enhanced Life Estate Deed which is used to convey property to your heirs outside of probate. The nickname "Lady Bird" was given to the deed after President Lyndon B. Johnson allegedly used this type of deed to convey some of his real property to his wife Lady Bird. So why would President Johnson use this type of deed?

Lady Bird Deed Features
The Lady Bird Deed is a variation of the quit claim deed with certain "enhanced" features. These features include:
(1) allowing the property owner to retain his homestead creditor and tax exemptions;
(2) keeping the property owner's home exempt from Medicaid claims during his lifetime;
(3) allowing the property owner to pass the property to his heirs outside of probate upon death free of Medicaid claims and liens; and
(4) allowing the property owner to sell or otherwise dispose of the property without the consent of the beneficiaries.

It is a specially designed instrument that is only available in certain states. Like the traditional Life Estate Deed there is often no capital gains tax if the property is sold shortly after your death. It goes beyond a life estate deed, because not only does the property owner get to live there for life, but the owner also reserves the right to sell or otherwise dispose of the property without the consent of the heirs. See also my articles on the Florida Enhanced Life Estate Deed, Texas Enhanced Life Estate Deed, Ohio Enhanced Life Estate Deed, and Kansas Enhanced Life Estate Deed.

Texas Enhanced Life Estate Deed

2011-11-02T17:11:00.000-04:00

Texas is one of several states that recognizes the Enhanced Life Estate Deed (a/k/a Ladybird Deed) as a means of transferring property to your heirs when you pass away. In simple terms, the Enhanced Life Estate Deed changes the way the property is owned from the usual form of ownership (like the General Warranty Deed or Quitclaim Deed) where the house or property is disposed of by the courts using the probate process into an ownership that transfers the property directly to a named beneficiary when the current owner passes away.

Unlike Beneficiary Deeds in other states, the Texas Enhanced Life Estate Deed does not give the beneficiary any rights in the property while the current owner is alive. This means the current property owner can sell the property at any time without the beneficiary's consent and the beneficiary's creditors cannot attach liens to the property while the owner is alive. There is no creation of a "Life Estate," nor is a Trust required.

Avoiding Probate
Instead of probate, the beneficiary need merely file the death certificate in the local county records for the property to be transferred.

See also my articles on the Florida Enhanced Life Estate Deed, Ohio Enhanced Life Estate Deed, and Kansas Enhanced Life Estate Deed.

Florida Enhanced Life Estate Deed

2011-11-02T16:18:00.000-04:00

Florida is one of several states that recognizes the Enhanced Life Estate Deed (a/k/a Ladybird Deed) as a means of transferring property to your heirs when you pass away. In simple terms, the Enhanced Life Estate Deed changes the way the property is owned from the usual form of ownership (like the General Warranty Deed or Quitclaim Deed) where the house or property is disposed of by the courts using the probate process into an ownership that transfers the property directly to a named beneficiary when the current owner passes away.

Unlike Beneficiary Deeds in other states, the Florida Enhanced Life Estate Deed does not give the beneficiary any rights in the property while the current owner is alive. This means the current property owner can sell the property at any time without the beneficiary's consent and the beneficiary's creditors cannot attach liens to the property while the owner is alive. There is no creation of a "Life Estate," nor is a Trust required.

Avoiding Probate
Instead of probate, the beneficiary need merely file the death certificate in the local county records for the property to be transferred.

See also my articles on the Texas Enhanced Life Estate Deed, Ohio Enhanced Life Estate Deed, and Kansas Enhanced Life Estate Deed.

Kansas Enhanced Life Estate Deed

2011-11-02T14:25:00.000-04:00

Kansas is one of several states that recognizes the Enhanced Life Estate Deed (a/k/a Ladybird Deed) as a means of transferring property to your heirs when you pass away. In simple terms, the Enhanced Life Estate Deed changes the way the property is owned from the usual form of ownership (like the General Warranty Deed or Quitclaim Deed) where the house or property is disposed of by the courts using the probate process into an ownership that transfers the property directly to a named beneficiary when the current owner passes away.

Unlike Beneficiary Deeds in other states, the Kansas Enhanced Life Estate Deed does not give the beneficiary any rights in the property while the current owner is alive. This means the current property owner can sell the property at any time without the beneficiary's consent and the beneficiary's creditors cannot attach liens to the property while the owner is alive. There is no creation of a "Life Estate," nor is a Trust required.

Avoiding Probate
Instead of probate, the beneficiary need merely file the death certificate in the local county records for the property to be transferred.

See also my articles on the Florida Enhanced Life Estate Deed, Texas Enhanced Life Estate Deed, and Ohio Enhanced Life Estate Deed.

What is a Beneficiary Deed?

2011-11-02T12:20:00.002-04:00

A Beneficiary Deed is used to transfer a property owner's real property to his heirs without going through the probate process which can be time consuming and expensive.

Included in the Beneficiary Deed are the names of the property owner's "beneficiaries." The interest in real property conveyed by a Beneficiary Deed does not take effect until the death of the owner. When the owner passes away the interest stated in the Beneficiary Deed transfers automatically by law to the designated "beneficiaries" named in the deed.

As stated above, a Beneficiary Deed takes the property out of the probate process as ownership is transferred upon death and no longer part of the decedent's estate. A beneficiary deed typically avoids the cost and delay of probate because the property is not part of the probate estate of the deceased owner. However, the property is usually included in the deceased's estate for estate tax purposes. Gift taxes may not apply because the Beneficiary Deed is not a present transfer of property.

Beneficiary Deed v. Trust
A Beneficiary Deed is typically less complex and expensive than setting up a trust. However, a trust may still be desirable in certain situations, such as when the beneficiary is a minor, when multiple beneficiaries will own undivided interests in the property, or when property is owned as joint tenants with right of survivorship.

Beneficiary Deeds are more common among the various states than the Enhanced Life Estate Deed. State laws governing beneficiary deeds vary by state, so local laws should be consulted.

Quick Claim Deed

2011-11-01T18:33:00.000-04:00

Quick Claim Deed
A Quik Claim Deed is the common misspelling for the legal document known as the Quit Claim Deed. It can be used to transfer someone's ownership interest in a piece of property to another person. The Quit Claim Deed is usually used by family members to transfer property back and forth. There are no warranties or representations made in a Quit Claim Deed.

Ohio Enhanced Life Estate Deed

2011-11-01T17:20:00.000-04:00

Ohio is one of several states that recognizes the Enhanced Life Estate Deed (a/k/a Ladybird Deed) as a means of transferring property to your heirs when you pass away. In simple terms, the Enhanced Life Estate Deed changes the way the property is owned from the usual form of ownership (like the General Warranty Deed or Quitclaim Deed) where the house or property is disposed of by the courts using the probate process into an ownership that transfers the property directly to a named beneficiary when the current owner passes away.

Unlike Beneficiary Deeds in other states, the Ohio Enhanced Life Estate Deed does not give the beneficiary any rights in the property while the current owner is alive. This means the current property owner can sell the property at any time without the beneficiary's consent and the beneficiary's creditors cannot attach liens to the property while the owner is alive. There is no creation of a "Life Estate," nor is a Trust required.

Avoiding Probate
Instead of probate, the beneficiary need merely file the death certificate in the local county records for the property to be transferred.

See also my articles on the Florida Enhanced Life Estate Deed, Texas Enhanced Life Estate Deed, and Kansas Enhanced Life Estate Deed.

What is a Life Estate Deed?

2011-11-01T15:41:00.000-04:00

Life Estate Deed
A Life Estate Deed is a document that grants ownership of a parcel of real property to two separate parties: (1) the Life Tenant, and (2) the Remainderman.

The Life Tenant
The deed gives the Life Tenant complete use and ownership of the property for a certain period of time. That period of time is measured by the life of a natural person; usually the Life Tenant’s. In other words, if I am the Life Tenant and the time period is measured by my life then when I pass away the “life tenancy” automatically terminates. However, if the time period is measured by the life of my wife and my wife passes away before me the Life Estate automatically terminates upon her passing and I can legally be evicted from the property.

The Remainderman
When the Life Estate owned by the Life Tenant terminates, the Life Estate Deed transfers ownership of the property to the Remainderman. The Remainderman is the person or persons whose names are listed on the Life Estate Deed as a Remainderman. To officially transfer ownership, in most states the Remainderman need only record the death certificate of the person whose life was the measure of the Life Estate.

Transferring a Life Estate
A Life Estate may be transferred from the Life Tenant to any other person. However, the person to whom the Life Estate is transferred takes ownership subject to the same conditions as the original Life Tenant. This is so even if the person is unaware of the Life Estate.

A Life Estate may be transferred using a Warranty Deed. The Warranty Deed must contain the state specific Life Estate language to create a valid Life Estate.

Obligations of the Life Tenant
A Life Tenant owes certain duties and obligations to the Remainderman. The Life Tenant is required to pay real estate taxes assessed against the property during the Life Tenancy, protect the property from tax sales, and keep the property free from encumbrances and not to allow the property to just go to waste.

A Life Estate is different from an Enhanced Life Estate. You can read my other articles on the Enhanced Life Estate Deed for a greater understanding of the differences.

Creditors and the Lady Bird Deed

2011-11-01T12:19:00.000-04:00

Does a Lady Bird Deed Protect My Property from Creditors of My Beneficiaries?
Yes. A Lady Bird Deed does not transfer ownership of the property to your beneficiaries until you pass away. This is different from other forms of transfer like the life estate, tenancy in common or joint tenancy with right of survivorship. While you are alive, your beneficiaries' creditors cannot attach or satisfy any claims to your property. A Lady Bird deed even allows you to remove a beneficiary if you find out that beneficiary has a creditor or creditors who would end up taking that beneficiary's portion of your property.

In states that recognize "tenancies by the entireties," Lady Bird deeds also protect married couples who own their home as husband and wife.

Ohio Payable on Death Accounts

2011-11-01T11:39:00.000-04:00

Ohio's banking regulations allow bank account owners the ability to name a beneficiary of their bank accounts in the event the bank account owner dies.

POD Account Avoids Probate
A Payable on Death (POD) bank account is not included in the account owner's estate and, therefore, passes to the beneficiary outside of probate.

How a POD Account Works
A POD account is different from a Joint Account in that the named beneficiary of a POD does not own an interest in the bank account until after the bank account owner passes away. The beneficiary cannot withdraw funds from the account while the owner is still alive and creditors of the beneficiary cannot attach the account to satisfy the beneficiary's debts.

How a POD Account is Set Up
To set up a POD bank account you will be required to execute a written contract with the bank designating the beneficiary of the account. Your bank likely has a standard form POD contract, but if not you may want to consult an Estate Planning attorney. The contract allows the owner to retain full ownership of the accound during his lifetime and to change the named beneficiary as often has desired.

Life Estate Deed

2011-10-31T22:21:00.001-04:00

Life Estate Deed
The Life Estate Deed is a document that grants ownership of a parcel of real property to two separate parties: (1) the Life Tenant, and (2) the Remainderman.

The Life Tenant
As in most states, the Life Estate Deed gives the Life Tenant complete use and ownership of the property for a certain period of time. That period of time is measured by the life of a natural person; usually the Life Tenant’s. In other words, if I am the Life Tenant and the time period is measured by my life then when I pass away the “life tenancy” automatically terminates. However, if the time period is measured by the life of my wife and my wife passes away before me the Life Estate automatically terminates upon her passing and I can legally be evicted from the property.

The Remainderman
When the Life Estate owned by the Life Tenant terminates, the Life Estate Deed transfers ownership of the property to the Remainderman. The Remainderman is the person or persons whose names are listed on the Life Estate Deed as a Remainderman. To officially transfer ownership, in most states the Remainderman need only record the death certificate of the person whose life was the measure of the Life Estate.

A Life Estate is different from an Enhanced Life Estate. You can read my other articles on the Enhanced Life Estate Deed and the standard Life Estate for a greater understanding of the differences.

Wyoming Life Estate Deed

2011-10-31T22:21:00.000-04:00

Wyoming Life Estate Deed
The Wyoming Life Estate Deed is a document that grants ownership of a parcel of real property to two separate parties: (1) the Life Tenant, and (2) the Remainderman.

The Life Tenant
As in other states, the Wyoming Life Estate Deed gives the Life Tenant complete use and ownership of the property for a certain period of time. That period of time is measured by the life of a natural person; usually the Life Tenant’s. In other words, if I am the Life Tenant and the time period is measured by my life then when I pass away the “life tenancy” automatically terminates. However, if the time period is measured by the life of my wife and my wife passes away before me the Life Estate automatically terminates upon her passing and I can legally be evicted from the property.

The Remainderman
When the Life Estate owned by the Life Tenant terminates, the Life Estate Deed transfers ownership of the property to the Remainderman. The Remainderman is the person or persons whose names are listed on the Life Estate Deed as a Remainderman. To officially transfer ownership, in most states the Remainderman need only record the death certificate of the person whose life was the measure of the Life Estate.

A Life Estate is different from an Enhanced Life Estate. You can read my other articles on the Enhanced Life Estate Deed and the standard Life Estate for a greater understanding of the differences.