Real Property Problems - The Dilemma of the Unmarried Couple

I just received a call from a local realtor.  She was understandably concerned because a purchase and sale transaction she was working on had stalled.  The reason:  the property was owned by an unmarried couple and one of the partners had recently died.  The title search revealed the couple had taken title as John Doe, an unmarried person and Susie Que, an unmarried person.  There was no indication on the deed that title should have been as joint tenants with rights of survivorship.

In Florida, when a deed is silent as to the type of joint ownership, the presumption is the property is owned as tenants in common - each party owns a respective share, usually 50/50.  Tenants in common means that each person's individual share can be sold or devised without restriction.  So, when the first partner died, his interest in the property passes according to his will (and in the absence of a will, according to Florida's intestate succession rules). 

Individually owned property requires probate at the time of death.  As a result, the pending sale will be postponed until such time as a proper estate administration (probate in this case) can be commenced and completed.  This means the closing will have to be delayed until the will is submitted to probate, approved by the court and the property is properly transferred to the deceased's intended beneficiaries. 

This issue might have been avoided if the couple had received legal counsel at the time they took title to the property so they would have understood the difference between tenants in common and joint tenants with rights of survivorship (JTWROS).  Property owned as JTWROS passes by operation of law at the death of the first owner.  All that would be required is the filing of a death certificate in the county where the property is located. 

This is one of those cases where a little counselling on the front end (when the couple took title) may have resulted in a significant savings of time and money on the back end.  Be sure to consult with a legal professional any time you are taking title to property - real or personal - as your decision may impact your estate planning in the future. 

A Tale of Two Bad Outcomes – Why Unmarried Couples Need Estate Planning

Bob and Kate are an unmarried couple, neither of whom have children, and who live together in a home owned by Bob, individually.  Let’s say Bob dies.  The good news is he has a signed will.  The bad news is he prepared the will himself, without consulting an attorney.  The will leaves his home to Kate, who intends to continue living there just as she has for many years.  

The will also nominates Kate as personal representative (PR) to carry out Bob’s wishes and the instructions contained in his will.  Kate retains an attorney and opens a probate proceeding in the county where Bob lived. The home is Bob’s only individual asset and therefore the only asset of his estate, subject to the probate proceeding. Typically, homestead property is not a true probate asset and if left to a person’s heirs, is not subject to the claims of estate creditors. However, because Kate was not married to Bob, she is not Bob’s heir, and as a result the house will now be subject to the claims of creditors that are timely filed in Bob’s estate. 

As PR and beneficiary of Bob’s estate, Kate is not required to pay creditor claims from her personal resources. The only asset subject to the claims of a creditor is Bob’s home.  So, if there are valid creditor claims, the home may have to be sold to pay the creditors, leaving Kate without a home. The alternative, even though not required by law, would be for Kate to pay the claims from her personal funds, in order to keep the home. Likely, this result was not Bob’s intent but because Bob was a do-it-yourself guy, he did not consult with any attorney and was not aware of these potential issues.

As an alternative, let’s say Bob did not leave a will but died intestate (without a will).  Bob’s estate will pass pursuant to the intestacy provisions of Florida law.  Remember, although Bob and Kate lived together, they are not married and therefore, no legal relationship exists between them.  Bob has a brother who is still living. Bob’s brother is the legal beneficiary of Bob’s estate.  Bob’s brother opens a probate proceeding and files notice to take possession of the house. In this scenario, Kate is once again left without a home.    

These are only two possible scenarios.  There could be others.  The bottom line and take-away:  proper estate planning is the key to making sure your assets pass as you intend, to those you intend, as efficiently as possible, taking into consideration all the possible alternatives.     

Probate Court Rememdies For Elder Financial Abuse

Here's an article talking about an important and common topic - elder abuse.   It addresses the issues surrounding a guardianship or conservatorship as ways of preventing or addressing possible abuse.  Your best defense is a well-designed and updated durable financial power of attorney along with a well educated family.  



Probate Court Rememdies For Elder Financial Abuse