Friday, September 25, 2015

Will gives Real Property to Beneficiary/ies; Do You Need Executor to Record a Deed?

In Texas, the answer is “no”.  (If the decedent died in a county other than the one where the real property is located, a court-authenticated copy of the Will and the order admitting the will to probate needs to be recorded in the other county.)  However, Texas is a “title company state” and the new owner or owners really need a title policy that “insures” ownership to them and insures that if there is ever a challenge to ownership, including liens on the property, the title company will pay the legal fees, not the insured owners.

The beneficiary/new owner really should get a title policy as soon as the Executor indicates that he, she, or it will receive ownership of the property (that is, the estate is not insolvent and the real property will, therefore, not have to be sold to pay creditors or, in any event, the real estate is exempt from non-secured creditors of the decedent).  If the beneficiary delays a year or more after death and probate, the title company may require a deed before it will insure the title.  The title company may ask for a deed even if the beneficiary requests one soon after death and the probate of the Will.  You’ll have to decide if it’s less expensive to have the Executor’s attorney draft a deed or ask a different title company if it is willing to insure the title without requiring a deed. 

Note, that if the Will gives real property to a surviving spouse who is already on the title policy, title insurance may not be necessary.  You should review the title policy and ask the title company, or its successor if it is no longer in existence, to confirm in writing that the surviving spouse’s ownership is completely insured.  (Do not be surprised if the surviving spouse cannot find it and you have to request a copy from the title company.)

You may want to pay a title company to run a search of the real property records (“official public records”) to see if there are any liens either on the property or recorded in the name of someone with a name similar to the decedent.  For example, there may be a mechanic’s lien filed when someone was doing work on your property to insure that you paid your bill.  You may actually have paid your bill and the worker forgot to release the lien.  You will either need to get the worker to sign a release now and, if not available, find out what the title company will need in order to accept proof that the bill was paid.  (In some cases, you may need to get a court order to that effect.)  If there are, you can decide whether to deal with them currently or wait.