Should I use a Special Warranty Deed, General Warranty Deed, or Quitclaim Deed when selling or acquiring property?
Generally, Sellers prefer to use a Special Warranty Deed and Buyers prefer to use a General Warranty Deed. The “Warranty” refers to the warranty of title given in the deed. A General Warranty Deed warrants absolute title (with the exception of any printed exceptions to the warranty) and a Special Warranty Deed warrants the title for the period that the Seller owned the property.
Quitclaim Deeds are often misused. A Quitclaim Deed does not actually convey property it just relinquishes any claims to a property. Oftentimes, if a Seller claims to own property acquired by a Quitclaim Deed, they will have trouble selling it because title companies are reluctant to insure the title to a property supposedly acquired by a Quitclaim Deed. Avoid the use of Quitclaim Deeds unless advised by a real estate attorney otherwise. As a Buyer, you don’t want to accept a Quitclaim Deed.
If you need help with a real estate transaction, contact the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300.
The Role of an Attorney in the Probate Process in Texas
The attorney prepares the application and the initial pleadings. Additionally, the attorney prepares all the motions and documents that the court requires. We typically provide the notices to creditors and to beneficiaries. An attorney’s job is to make the client’s life as smooth and simple as possible and to take that burden off of them during the stressful time of not only grieving but trying to clear up these financial matters of the decedent. It’s really doing whatever we can to make that process as simple as possible for them as we walk them through everything.
Can Someone Realistically Navigate Through The Probate Process Without An Attorney?
It would be difficult for someone to make it through probate on their own. Typically, the courts will require that they hire an attorney. Most courts will not let someone do it on their own because the courts do not want to end up giving legal advice to the applicant. If someone is trying to do it on their own, usually they’re missing steps and there is some liability for not doing it correctly. By having an attorney help you through the process, you are less likely to wind up in trouble. If you don’t meet certain timelines, you can be removed as the executor or administrator, or you might have to pay fines to the court.
What Is The Next Step?
If you have not made plans for your estate, we urge you to do so for the sake of your family or whoever is going to have to deal with the probate of your estate. If you have lost a friend or family member and believe that you should receive property through their will or as an heir, you should visit with an attorney to make sure you do actually receive the property and that it is titled properly. This may require probate but an attorney can help you avoid future headaches.
For more information on Role of An Attorney In Probate Process, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (830) 625-9300 today.
If qualifying for Medicaid and asset preservation are a concern, we can help the client prepare. Medicaid, unlike some other government programs, is not an entitlement program; if you receive benefits, the State of Texas wants to be reimbursed upon your passing. There are also income and asset requirements to qualify.
The income threshold to qualify for Medicaid is very low and, oftentimes, people make too much money to qualify but cannot afford to pay for the care they need with the income they have. A solution to this is the use of a Qualified Income Trust, or frequently called a Miller Trust. Income is directed to the Qualified Income Trust where a small allowance can be paid to the person and their spouse but the remainder goes to pay for their care and reduces their income to a threshold that qualifies for Medicaid.
The asset threshold to qualify for Medicaid is also very low. People are required to spend down their assets to qualify for benefits. One solution that helps some people is a Medicaid qualified annuity. This is a method of turning cash or other liquid assets into non-countable resource but provides an income stream.
The State of Texas has a Medicaid Estate Recovery Program (“MERP”) which attempts to get reimbursement after a person passes for Medicaid dollars spent on that person’s care during their lifetime. Medicaid will file a claim into the decedent’s estate for payment and typically the only asset remaining is the homestead. However, equity in a homestead can be protected. Sometimes people think they will just give away assets when they foresee a need for Medicaid in the future. The State of Texas anticipates people will try to do this so they have a five-year look back period. If assets are liquidated during the five years prior to the Medicaid application, there is a penalty period. The five-years look at gifts of interest in property during the look back period. A Transfer on Death Deed is a conveyance that takes place after someone dies and passes property outside of probate, thus protecting the homestead property and the equity in it for beneficiaries.
If someone is concerned about Medicaid qualification or protection of assets, we include that in the planning we do with them.
For more information on Medicaid Planning In The State Of Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (830) 625-9300 today.
What is a Transfer on Death Deed?
A Transfer on Death Deed is a tool that allows you own and control real property during your lifetime and then pass your real property to beneficiaries after your death without having to probate your estate. A Transfer on Death Deed needs at least one beneficiary but can have multiple beneficiaries and can have contingent beneficiaries should a primary beneficiary predecease you. The Transfer on Death Deed must be recorded in the Deed Record of the County where the real property is located prior to death. Other than passing real property outside of the probate process, a benefit of Transfer on Death Deeds is that it protects your homestead real property from a Medicaid recovery claim if you receive Medicaid benefits.
For more information on Transfer on Death Deeds and Medicaid Planning In The State Of Texas, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (830) 625-9300 today.
Estate planning for a blended family
There are many ways to estate plan for a blended family and below are four of the most typical ways to address estate planning for a blended family:
Reciprocal wills: Each spouse makes a will to provide for the surviving spouse and then the children/step-children. This is the simplest form of estate planning but leaves the risk that the surviving spouse revokes their will and leaves nothing to the children of the spouse that predeceased them.
Independent (non-reciprocal) wills: Each spouse makes a will independently, without involving the other spouse. The will of each spouse may or may not provide for the surviving spouse and may or may not provide for the children from a prior marriage or step-children.
Testamentary trust: The spouses could create wills with testamentary trusts where the decedent’s trust is funded at death with separate property and the decedent’s one-half of community property and becomes irrevocable. The surviving spouse benefits from the trust if needed but the remainder of the estate is distributed to the decedent’s children upon the death of the surviving spouse.
Life insurance: Life insurance allows for providing something to a surviving spouse or surviving children even if the estate does not provide for them. However, if someone has waited until they are older or in poor health, life insurance may not be an option.
If you have a blended family and would like to discuss options for your estate, we would be happy to help you. Call the Law Office of Roy Neal Linnartz, PLLC to schedule a time to discuss your plan, (830) 625-9300.
A Living Trust is a trust created and funded during the Trustor’s (sometimes called Grantor or Settlor) lifetime which is typically for the benefit of the Trustor during Trustor’s lifetime and then provides for other beneficiaries after the death of the Trustor. The primary purpose of a Living Trust is usually to avoid the probate process but a Living Trust can be created to plan for many other purposes. If the purposes of the Living Trust is to avoid probate, all property must be owned and titled to the Trustee during Trustor’s lifetime or probate will still likely be required for property not titled to the Trustee. When a Will is probated, the property of the decedent is distributed at that time but a Living Trust also allows for property to be held and managed beyond the decedent’s death thus giving control beyond the grave for a period defined in the Living Trust (with limits).
A Testamentary Trust is a trust which is included in a Will and which is created and funded after death. Testamentary Trusts can be used to plan for most things a Living Trust can be used for other than avoiding probate. The benefit of a Testamentary Trust is that the Trustor does not have to worry about having all of their property titled to the Trustee, which is very abstract to most people. If the purpose of creating a trust is to protect assets for children, plan for a special needs family member, or tax planning, these, among other things, can be usually be done in a Testamentary Trust without the need to manage a trust during a person’s lifetime.
If you would like to discuss how a Living Trust or Testamentary Trust can benefit you, please contact the Law Office of Roy Neal Linnartz, PLLC at 830-625-9300.
LLCs offers benefits such as limited liability, tax benefits, legitimacy in business dealings, creating a structure for operations, and remaining personally anonymous.
A LLC is an entity having its own legal rights and obligations, of which the owners are not. This allows for compartmentalizing liability and asset protection which is one of the main and most common reasons for using a LLC.
LLCs can offer tax benefits in that the IRS doesn’t recognize LLCs so the IRS allows you to designate how you want to be taxed and you can be a pass through entity. In certain situations, you can save on Medicare and Social Security taxes by structuring the Member’s compensation and distributions but this should be planned and discussed with your tax advisor.
A LLC offers legitimacy to doing business. A LLC is an officially created entity which is formed and registered with the Secretary of State in the state of Texas. “Bob’s Builders, LLC” sounds legitimate than “Bob Smith dba Bob’s Builders”.
A LLC should have a Company Agreement (sometimes called an Operating Agreement) which governs how the LLC is operated. Chapter 101 of the Texas Business Organizations Code defines what should and can be included in a Company Agreement. When a LLC has more than one Member, the Company Agreement is important to outline how the LLC will operate and the relationship of the Members.
LLCs offer some anonymity in that all contracts or transactions should be done in the name of the LLC rather than one’s personal name. If there is a dispute or if liability is incurred, it should be the LLC which is sued rather than the Members individually.
These are just some very basic concepts related to LLCs. If you think a LLC would benefit you, we would be happy to help you with your LLC. Please call 830-625-9300 to schedule a time to meet with a lawyer who can help with your LLC.
Some people may ask what is a Series LLC and why would I need one? The Series LLC concept was created by the Texas Legislature and is in Chapter 101 of the Texas Business Organizations Code as a form of LLC. A LLC allows for the limiting or compartmentalizing of liability to protect other assets. If you own rental properties, you could create a LLC for each property but you would have to file a tax return for each LLC. The Series LLC allows for the creation of a Series for each property which are tied to a LLC whereby each Series has its individual limited liability. Proper language should be used in both the Certificate of Formation and the Company Agreement to properly establish a Series LLC. Additional Series can be added to the LLC by amending the Company Agreement and filing an Assumed Name Certificate. This allows for the filing of one tax return with a schedule for each property and it saves on LLC filing fees. If you have rental properties and would like to establish a Series LLC, please contact the Law Office of Roy Neal Linnartz, PLLC and we would be happy to help, (830) 625-9300.
Can I use an Affidavits of Heirship to sell real estate of which I am an heir when the Decedent didn’t have a Will?
Possibly. Affidavits of Heirship (“Affidavits”) are not like a deed that conveys title but rather is evidence of who the heirs are to complete a chain of title so the heirs can sell the property. The Affidavits are evidence for a court proceeding on an heirship once the Affidavits have been recorded in the County Records for five years. However, many title companies will accept Affidavits that have been recorded less than five years.
The Affiant, person making the Affidavit, cannot be an interested person (someone who is an heir or has an interest in the estate) and must swear to the following facts (there must be two Affiants):
- That Affiant knew the Decedent and dates which they knew Decedent
- The date and location of the Decedent’s death
- Address where Decedent resided
- Decedent’s marital and family history and identification of heirs
- That Decedent died without a Will
- That Decedent has no debts and owes no taxes or a list of unpaid debts and taxes
- That there is no administration of the estate
- A description of the property
Affidavits of Heirship are not appropriate in every scenario but do serve a purpose in certain circumstances. If you have issues with selling real estate and would like to explore whether an Affidavit of Heirship could benefit you, please contact the Law Office of Roy Neal Linnartz, PLLC at (830) 625-9300.