Small corporations also must follow TBOC requirements
never heard of this kind of deed. Do you all recommend this as a good estate planning mechanism?
Q:
My husband and I set up a small corporation years ago to take title to our real estate interests. We have both commercial and residential properties in the name of the corporation. Someone recently told us that we may not have any insulation of liability if we don’t have annual minutes of shareholder’s meetings and director’s meetings. Is this true?
A:
Yes. If you seek the protection against personal liability by incorporating, you must follow the requirements of the Texas Business Organizations Code. Many people get incorporated online, or through some service, but don’t know the rules they have to follow. Go online and print off a copy of the pertinent parts of the statute and read them. It is very important to do so. There are statutory provisions for shareholders meetings, directors meetings, keeping minutes, authority of officers, etc. If these are ignored the protection of the statutes may go away. We call it “piercing the corporate veil.” A good, experienced lawyer is a big help.
Q:
My estate planning lawyer wants my husband and me to sign a transfer on death deed to avoid probate when we pass away. I’ve
A:
We don’t know. This document was enabled in the last Legislature. Real estate lawyers are scratching their heads, as it doesn’t transfer title until death, and doesn’t need to be delivered, so how can it be a deed? Title companies are still working on these issues for purposes of insurability. We have already worked on one of these where the beneficiary (party to whom title was transferred) couldn’t be found when the parents died. In addition, a subsequent deed signed by the grantors voids the TODD, so it is apparently a revocable grant of title. We’d wait until a few cases are decided involving this kind of transfer.
Q:
I purchased a home in 2012. I have come to suspect from some of the neighbor’s comments as well as workmen here at my home, that a major condition was not disclosed to me. If this situation turns out to be true it would cost me thousands to rectify. Am I better off not knowing for sure or should I have an attorney contact the former owner to verify the rumors by the neighbors? Has the window of opportunity passed to do something legally? The Realtor had to have knowledge, as her husband built the home originally. There are rumors of having a lead-lined room for a nuclear disaster. So much phony stuff I have found since living here, I tend to believe the neighbors, but if it is true, I will never be able to sell the house if I know for sure.
I would not do that to another buyer.
A:
Ignoring the fact that there is something wrong is not the answer. If there’s something wrong, you need to know it, not only for yourself but for a resale. Once you have determined all the facts, you may have a cause of action against the seller. Right now, you just don’t know. Rumors aren’t evidence in a lawsuit.
Q:
My husband and I are trying to buy a house. My husband travels a lot, is very involved with his business, and just doesn’t want to be bothered with the issues in the home purchase. The Realtor is getting very frustrated, as we can’t get signatures timely to compete in this Houston market. Is there a better way to handle this?
A:
Yes. Your husband can give you a durable power of attorney to sign on his behalf the next time he is in town. Your title company can probably provide a form, or have one drafted for you by an attorney.
As an alternative, you can always email the contract to your husband, have him initial and sign, and email it back to you.
The law said you can’t deny the enforcement of a document merely because it was transmitted electronically. What a wonderful time we live in. Good luck on your purchase.