7 Unexpected Problems
Affidavits of Heirship Cause at a Real Estate Closing
Some realtors think that using an affidavit of heirship to clear title after the death of the person selling real estate is a short cut or is less expensive than probate of a will. Realtors have referred clients to us in the following seven situations because the affidavit of heirship was not a short cut and was not less expensive than probate:
1. The Realtor called when he discovered that one of the heirs had a tax lien. The title company could not close because the tax lien had to be paid first. It took a long time for the heir with the lien to come up with the money to pay the tax debt. Then, it took a long time for the IRS to release the lien. If the last will and testament had been admitted to probate and if the executor had been appointed, the tax lien would not have been a problem for the executor. The sale could have closed, the proceeds could have been deposited into the Estate account, and the Realtor would have been finished with the project.
2. The Realtor called when her client remembered that her deceased husband had children from a prior marriage. The deceased husband and the surviving wife had been married for over forty years. She did not even think to tell the Realtor about her deceased husband’s prior marriage and children of that prior marriage. Because the deceased husband died without a will, however, this information was very important. The surviving spouse of someone who had children from a prior relationship only inherits a fraction of the deceased person’s property.
3. The Realtor called when his client could not remember or did not know the dates of birth and addresses of the other heirs. An affidavit of heirship requires a lot of information. The affidavit must include the dates of all marriages, all divorces, all dates of birth of biological children, all dates of death of heirs, and addresses of all of the heirs.
4. The Realtor called when one of the heirs could not sign the listing agreement, sales contract or deed because a particular heir had mental illness or disability. The Realtor knew that she would need the heirs to sign the listing agreement but she did not find out that one of the heirs was disabled until much later. The signature of a disabled person can be challenged because contracts signed by a disabled person are voidable.
5. The Realtor called when he found out that the surviving spouse owed more to creditors than the deceased person’s estate was worth. We were able to help the surviving spouse because probate is like bankruptcy. The probate court can enforce a payment plan of the debts based on how much money is available to pay.
6. The Realtor called when he heard that the heirs could not agree whether to fix up the house to increase its value, sell it “as-is,” and could not agree on what price to list the property. Using an affidavit of heirship instead of probating a last will and testament means that the Realtor represents all of the heirs. A Realtor who represents all of the heirs must get agreement from all of the heirs about what price to list the property. It was much easier to probate the will and deal with one decision maker – the independent executor.
7. The Realtor called when the title company asked whether the deceased person had ever received Medicaid benefits. The Medicaid Estate Recovery Program, better known as MERP, requires reimbursement from the estate of a person who received Medicaid benefits up to the amount of medical assistance paid. The Department of Aging and Disability Services, known as DADS, is responsible for administering this program. DADS contracts this collection process with a company called HMS. In addition to beneficiaries who qualify for exceptions to this program, elder law attorneys are often able to successfully defend these claims or negotiate better terms.
Frequently Asked Questions about Affidavit of Heirship:
Question: What is an affidavit?
Answer: An affidavit is an instrument legally executed and acknowledged or sworn to before, and certified by, an officer authorized to take acknowledgments or oaths. Section 203.001 of the Texas Estates Code.
Question: What is an heir?
Answer: An heir is a person who is entitled under the statutes of descent and distribution to a part of the estate of a decedent who dies intestate Section 22.015 of the Texas Estates Code. An affidavit of heirship can be used as evidence to prove a person was entitled to part of an estate of a person who died without a valid last will and testament. Section 203.001 of the Texas Estates Code.
Solution: Probating a valid last will and testament will protect the beneficiaries from attack decades later. In Frost Nat. Bank v. Fernandez, 315 S.W.3d 494 (Tex. 2010), the Court held that “the Texas Probate Code does not authorize a probate court to exercise jurisdiction over heirship claims when an estate has been closed for decades and the decedent did not die intestate.”