This column first appeared in the San Antonio Express-News and other Hearst newspapers on February 10, 2020.
Dear Mr. Premack: Our mother owned her house but never made a Will or saw a lawyer about the house. She died about a year ago after telling us she wants her sister to have the house. My siblings and I all agree and want our aunt to have it. How do we transfer ownership to our aunt when there was no Will? – AV
When a person dies owning real property, there are several legal pre-planning documents that may have an impact on establishing the identity of the new owners (if decedent ever got around to making one of them).
The first is a Will, which is the most traditional method to pass ownership upon death. Your say mother did not have a Will. If she had, then with the assistance of your attorney you could present the Will for probate, the named heirs could claim ownership of the house, and they could then transfer ownership to your aunt.
The second possible document is a Transfer on Death Deed, which is not often recommended by lawyers because the property remains exposed to the decedent’s debts. However, this has been part of Texas law for several years, and if your mother properly signed one before a notary and recorded it with the county clerk, then the person she named in the deed could own the house without probate.
The third possible document is a Living Trust. If your mother had her lawyer write a trust and transfer the house to the trust, then upon her death the Trustee would be able to transfer ownership of the house to the named beneficiary. If your mother never made a Will, it is highly unlikely that she made a Living Trust.
The fourth possible document is an Enhanced Life Estate Deed (informally called a Lady Bird Deed). Care must be taken when using this legal tool, but if done properly your mother would have retained life estate in the house while naming a person to own the house upon her death. Your mother would have retained the right and power to change her mind by revoking the deed. If she did not revoke it before dying, title would have transferred without probate.
If your mothed did not take advantage of those pre-planning tools, all of which simplify and clarify the situation thus saving time and money, then the state’s laws of descent and distribution must be applied to determine who owns the house. Her husband would have first claim. If she was unmarried, then her children have next claim. The question is: how is that claim legally established?
One method is to have your lawyer probate her estate in court as a dependent administration. The court will supervise the process, and after many legally protective steps are applied, will declare who inherited the house. Administration also provides a method to settle your mother’s remaining debts, handle any mortgage, pay her final taxes, and settle all outstanding legal claims.
Another method is to declare ownership using an Affidavit of Heirship. Your lawyer will prepare the Affidavit according to state law, and have three witnesses sign it with a notary before it is filed in the county clerk’s real property records. There is no court decision on ownership, so the Affidavit can be challenged in the future and is not as reliable as a probate Administration.
Once the identity of the new owners is legally established, they can agree to transfer the property to your aunt. There are choices to be made here as well. A) An outright deed may involve federal gift taxes, and gives your aunt the right to dispose of the property at her whim. B) Conveying a life estate to her would limit her ownership, granting her the right to occupy and enjoy the property until she dies. The title would revert to the grantors so they would have future benefit from the property. C) Putting the house in trust with her as the beneficiary retains control and gives her occupancy rights. D) Leasing the house to her for life is an option. You must consult with your own legal counsel to make the choices that are best for your specific situation.
Paul Premack is a San Antonio Certified Elder Law Attorney, handling Wills and Trusts, Probate, and Elder Law issues. View past legal columns or submit free questions on those legal issues via www.Premack.com