Can Heir Deed Property Without Probate? - Posted by IB (NJ)

Posted by The Frisco Kid on May 07, 2006 at 23:59:24:

Luke

If that were true, why would Washington state even take the time to pass such a statute?

There is no way in the world that I would do it that way in California.

I have lots of relatives in various states that may remember me in their wills, I am willing to let my future potential interests go for cash and of course I am willing to give quitclaim deeds.

Can Heir Deed Property Without Probate? - Posted by IB (NJ)

Posted by IB (NJ) on May 05, 2006 at 10:58:24:

I thought I read something about that from Kristine (CA) on here.

The original owner, Patricia, is dead. Her only child, Tom, wants nothing to do with the property (too many liens, etc.). The estate hasn’t been probated.

(In most cases) Can Tom assign his interest to me? Typically what form(s) would be needed?

I’m going to check with my attorney on this but wanted some information from creonline as a starting point. Thx. in advance.

Ib

Re: Can Heir Deed Property Without Probate? - Posted by RE King

Posted by RE King on May 08, 2006 at 23:21:15:

It depends on the state and your title company how easy this will be:

  1. Indiana: Under 25k value, get an affidavit of heirship and quitclaim, you’re done.
  2. Illinois: Get affidavit of heirship for any value, get quitclaims(s), run it past your title co., and you’re done in many cases.

Illinois is great, I’ve closed many deals with no probate (especially ones where the owner has been gone a while) with just a QC and a affidavit.

Certain other states I’ve looked into seem to have strict rules about having to go through probate.

I agree with other posters who said, get assignment of heirship, affidavit of heirship, and QC, and if you got a good enough deal on it (10% FMV)?, you will come out ahead after the dust settles. Sure you might have some legal headaches but the payday will be great.

And yes I’ve done this many times myself and gotten the check.

How do you get these for 10% FMV? Happens all the time if you look in the right spots. Joe Kaiser is the expert at that.

Re: Can Heir Deed Property Without Probate? - Posted by Kristine-CA

Posted by Kristine-CA on May 08, 2006 at 24:58:52:

IB: yes, an heir can assign their interest. I use assignment agreements
that are specific to the estate, the property and the heirs involved.
Sometimes with the help of an attorney, sometimes not.

My experience is that the only times I used quit claims from heirs is
that they were worth nothing–I ended up starting over again with
purchase contracts and agreements with the heirs to sell to me after
the probate was complete. Buying heirs interest, in my experience so
far, has been much more secure and much easier. However, I pay cash
up front, which not everyone will want to do.

I’m thinking that if you explain to your attorney exactly what it is that
you are trying to do, they can can help with the docs pretty easily.
Kristine

Here Are the Steps to Open & Close Probate - Posted by Elizabeth NJ

Posted by Elizabeth NJ on May 06, 2006 at 16:02:12:

Hello IB,

You know I have to say this: Nothing stated herein may be construed as legal advice.

Here are the steps you must take to buy this property legally and without any question of impropriety.

No title company that I know of will permit a seller to close on this kind of deal because the seller does not own the property and the deceased cannot come out of the grave to execute a deed. The heir must have the probate court’s official approval. It’s a simple matter of opening and closing an estate.

I have literally walked heirs thru probate court to get them appointed as administrator of the estate to sell the property which is the only asset of the estate. The probate clerk will ask if you are the legal representative of Tom. If you are not, then Tom should just say you’re a friend. If you want an attorney to walk Tom thru this process, you can but it will just cost you more money.

Tom will go to probate court with you - no appointment necessary. He will need a certified copy of his mother’s death certificate, and a copy of his birth certificate to verify his lineage, and of course appropriate identification. I usually print out from NJACTB (the NJ state tax boards) the page referring to the property so the probate officer can clearly see the ASSESSED value of the property, because the bond will be issued based upon that value less any liens. By the way, it was the probate clerk who told me to use the assessed value, not my idea. The probate officer will have Tom fill out an affidavit regarding his lineage, the value [assessed] of the property, any and all liens against the property, and the difference will be the value basis for the bond that is required to be issued in Tom’s name. He’s a class A beneficiary so no estate tax will need to be paid. By the way, I would have Tom execute an affidavit in which he affirms that he is the one and only child from his deceased mother. It’s not required for closing, but keep it in your file. I’m a strong believer in backup documentation.

If you get to probate court early enough in the day and Tom has all his documents, you might get everything you need that day. The probate clerks are great & they will recommend a bonding company near the court. Take Tom to the bonding company, & he will present the documents the bonding clerk asks for, pay a fee and the bond is usually issued either the same or next day, depending on how backed up they are. Once the bond is issued, take Tom back to your probate clerk, present the bond, and he will be given an Order appointing him as administrator.

The Order authorizes Tom to do any and all acts necessary to dispose of the property. Tom’s signature block on the contract with you should clearly state that he is the administrator of the estate of so-&-so. I usually attach a copy of the order of administration to the contract so it’s clearly evident to anyone interested.

Let Tom know that you will be responsible for any and all fees in connection with his appointment as administrator [the cost of the bond and the fees to the probate court]. Your contract should clearly state that Tom will be reimbursed at closing for those fees if he paid them, and list them in the contract. If you advanced the fees, your contract should state that all fees in connection with his appointment as administrator were advanced by the Buyer [you], and that no fees are reimbursable to the Seller at closing. Tom will need his own attorney for closing because he is acting in a fiduciary capacity. I usually pay for that attorney because I hire one I’ve used myself, so there won’t be any unexpected events at closing. Tom’s attorney will have to execute certain documents required by the state relating to estate tax. Make sure your contract states the Buyer will retain an attorney for seller and pay for that attorney’s fees & costs at closing. I usually give my attorney a listing of all expenses/fees that I will reimburse to the seller/heir at closing and they are broken down on the HUD-1.

After the sale, take Tom back to the bonding agency & they will cancel his bond. Any reimbursement from them for any unused portion of the bonding fee will be to you if you advanced that fee. Then take Tom back to probate court & they will issue a document canceling his appointment.

And that’s all there is to it. My lengthy description of the process makes it sound quite involved, but the truth is that it is really very simple. Do this once, and you will wonder why you walked away from deals like this.

I don’t know what you offered Tom as a purchase price, but I would sweeten the offer a little to get him to probate court. And of course explain to him that no other investor/buyer is going to take the time to help him sell and profit from the property except you. Tell him you’re doing everything, all he has to do is show up and sign a few documents and he’ll make a lot of money.

I had a deal where none of the adult kids wanted to serve as administrator, so I prepared an affidavit which they each signed agreeing to permit their uncle to serve and to pay him a set fee from their proceeds of sale. They renounced their rights to serve [documents required to be executed by heirs with probate court], so I took him thru the process, we closed and everyone was happy. So, the administrator doesn’t have to be a direct heir, so long as all documents required by probate court are properly executed by the direct heirs, if any, relinquishing their rights through renunciation affidavits.

Also, IB, I keep blank copies of the probate court’s affidavits in my office. I don’t think they differ much for NJ counties, but if you want to see one, email me your fax number & I’ll fax the forms over to you on Monday.

Good luck.

Elizabeth

Re: Can Heir Deed Property Without Probate? - Posted by MM

Posted by MM on May 06, 2006 at 04:38:02:

I’m not sure how your state handles these matters, but usually the executor is the only one who can sell a property during probate (make sure they call them an executor in your state, some states have a different name for it, but they serve the same function), in fact that’s part of the executors job, to make sure the heirs get a fair price for anything thats liquidated. If there isn’t already an executor then you’ll likely have to wait until the courts appoint one. Try going to your county court house and ask them where probate records are kept. If an executor has already been named, then you should be able to find their contact info in the records (of course every county has their own system, so it may not be public in your location).

Re: Can Heir Deed Property Without Probate? - Posted by Redline

Posted by Redline on May 05, 2006 at 23:00:52:

Yes the heir can quitclaim the thingy to you and if you can get them to do that, excellent.

Now you’ve got to move to probate it and get paid.

That’s my understanding.

Good luck,
RL

No. but tthere’s an answer. - Posted by Jimmy

Posted by Jimmy on May 05, 2006 at 14:19:26:

the heir has nothing to transfer. title must first be vested in the heir. this can happen via probate. or maybe a non-probate method is available in your state. some states allow affidavit trasnfers where the values are low enough.

Re: Here Are the Steps to Open & Close Probate - Posted by IB (NJ)

Posted by IB (NJ) on May 08, 2006 at 19:12:51:

As Salaamu Alaikum Elizabeth. Thanks for the informative posts. I’ve walked a couple of sellers through the probate process so I’m familiar with it.

Perhaps I should have explained further that ‘Tom’ doesn’t want to get involved at all. He claims there’s too many liens against the property. I explained to him my experience in negotiating discounts on liens and even guaranteed him $30k. The guy wouldn’t go for it, explained again that he wanted nothing to do with the property, and hung up.

So I figured I’d try one last time and send him a $1000 check in exchange for his interest in the property. Just wasn’t sure how to do that. I’ll check with my attorney in the morning.

Thanks again.

PS - One thing I learned in your post was the part about cancelling the bond. Do you suggest that after the property is deeded to me by the Administrator, I should have the seller cancelled as Administrator of the estate? Why? Is it for liability reasons?

Ib

Sorry, but no way - Posted by Kristine-CA

Posted by Kristine-CA on May 08, 2006 at 24:43:44:

Any one can quit claim anything. While a quit claim from an heir may
cloud title and the heir may think they are done with the deal, that quit
claim deed won’t do much when trying to acquire a proeprty.

There are several ways to deal with properties held in the names of the
decedents, but if you want to move towards a probate you need
something that gives you a reason to open a probate. An assignment
of the heirs interest in the estate is a good start. Kristine

Re: No. but tthere’s an answer. - Posted by Kristine-CA

Posted by Kristine-CA on May 08, 2006 at 24:47:14:

Jimmy: while an heir has nothing to transfer via a deed, an heir has an
interest that can be assigned. You may not have seen that in your legal
practice but it is not uncommon. Kristine

Re: No. but there’s an answer. - Posted by Joe Kaiser

Posted by Joe Kaiser on May 06, 2006 at 05:23:29:

Hypothetically, let’s say you stand to inherit a house, and for simplicity
sake, you’re the only heir. No question about it, once that estate is
probated, you’ll be the owner.

Do you really think you have “nothing to transfer” at the moment?
Actually, you do.

Are you familiar with the concepts “after acquired interests” or
"inheritance expectancies?"

Certainly, you have something you can sell, today, pre-probate. You
have an interest you will be acquiring and you have an expected
inheritance coming your way.

And there are plenty of ways to transact here and do this deal.

Joe

Re: Here Are the Steps to Open & Close Probate - Posted by Elizabeth NJ

Posted by Elizabeth NJ on May 09, 2006 at 11:17:23:

Hi IB,

The only reason for the Administrator to have his bond cancelled and his order of administration cancelled is because after the sale of the property – if in fact it was the sole asset of the “estate” – there are no other assets and no further responsibilities for the Administrator to carry out so no reason for the probate to remain open.

Best to you.

Elizabeth

P.S. Email me the parameters of this deal including your guy’s contact info & I’ll get him to the table for you.

Re: Sorry, but no way - Posted by RE King

Posted by RE King on May 08, 2006 at 23:24:53:

Kristine-

I have always made sure to read your posts whenever they come up because you give some great advice.

However, I have to respectfully disagree with your statement. I think this is a highly state-specific thing and in the two states where I primarily work QC’s and affidavits of heirship will many times get good title immediately with my title company’s blessing.

I Stand by my Answer - Posted by Jimmy

Posted by Jimmy on May 06, 2006 at 09:09:17:

The Question was: Can Heir Deed the Property?
and the answer is NO.

the heir can enter into a contract that obligates the heir to make the transfer down the road, if at some point, the property finds it way into his or her hands.

but the heir has nothing to transfer via deed until the property is vested in his or her name.

Re: Sorry, but no way - Posted by Kristine-CA

Posted by Kristine-CA on May 09, 2006 at 23:08:07:

RE King: thanks for the respect. Hmm… a quit claim deed? Really?
Here in CA it is my understanding that quit claims do not convey after
acquired title–only the interest at the time of the execution of the
deed.

I agree it’s state specific, to be sure. I’ve been envious more than once
of investors working in states where a title company will accept an
affidavit of heirship. Are you saying that you can present a title
company with a quit claim and affidavit and you are all set to go? Are
the docs executed and recorded at the same time?

Thanks for your input. Sincerely, Kristine

Re: I Stand by my Answer - Posted by The Central Scrutinizer

Posted by The Central Scrutinizer on May 07, 2006 at 08:00:09:

No offense, but I believe Jimmy because he is a probate attorney – even if he is wrong.

and it is wrong… - Posted by lukeNC

Posted by lukeNC on May 06, 2006 at 19:55:53:

“quit claim” deed can be done at any time.

Re: I Stand by my Answer - Posted by Joe Kaiser

Posted by Joe Kaiser on May 06, 2006 at 12:37:58:

Here’s another hypothetical then . . .

Let’s say this same fellow gives me a deed to his unprobated interest
and 6 months later probate closes, giving him the house.

You’re the judge . . . who owns the house?

I can give you a deed right now to the Empire State Building, conveying
to you whatever interest I have or may have at some point in the
future. Probably wouldn’t be worth a lot to you, but who knows.

Here’s the statute in my state:

RCW 64.04.070
After acquired title follows deed.

Whenever any person or persons having sold and conveyed by deed
any lands in this state, and who, at the time of such conveyance, had
no title to such land, and any person or persons who may hereafter sell
and convey by deed any lands in this state, and who shall not at the
time of such sale and conveyance have the title to such land, shall
acquire a title to such lands so sold and conveyed, such title shall inure
to the benefit of the purchasers or conveyee or conveyees of such
lands to whom such deed was executed and delivered, and to his and
their heirs and assigns forever. And the title to such land so sold and
conveyed shall pass to and vest in the conveyee or conveyees of such
lands and to his or their heirs and assigns, and shall thereafter run
with such land.

Joe

Re: Sorry, but no way - Posted by RE King

Posted by RE King on May 10, 2006 at 01:30:11:

Just reread you message, and to clarify:

You always record the documents that purport to vest title in the heirs first, THEN the heirs QC it to you. At that time the title company decides if they feel good about it. You can usually propose what you’re going to record first though, and they’ll tell you if they’ll go for it in advance.

Of course you get all the documents at once from the heirs and record them right next to each other, you wouldn’t want to do all the work to put title into the heir’s name and give them a chance to cut you out.