Two-year wait for sale of property after death aids creditors
The information in this column is intended to provide a general understanding of the law, not as legal advice. Readers with legal problems, including those whose questions are addressed here, should consult attorneys for advice on their particular circumstances.
Q: A few weeks ago when answering a question about Transfer on Death Deeds, you said there is “concern that there will be a two-year wait after death before the property can be sold.” Is this true? Why? Also, I filed my TOD Deed right before the more complicated revision of the law went into effect. Do I need to change it to conform to the new law?
A:
Yes, there can be a twoyear wait, but it won't be a problem for most estates.
The concern is when a person dies with creditors who want to get paid. The Texas statute essentially says you can't make an end run around those creditors by giving the property directly to a beneficiary using a Transfer on Death Deed. The executor of the estate has two years to sell the property to pay off the estate's debts.
Title companies are aware of this two-year period, and sometimes they are unwilling to insure title. Fortunately, though, it seems that title companies are being quite reasonable with this issue. Rather than refuse to issue title insurance, title companies simply require satisfactory evidence that all debts have been paid (and that no federal estate taxes are owed).
But if an estate has creditors, the two-year wait will likely apply. Of course, even without the Transfer on Death Deed, an estate with lots of creditors would have the same issue regarding the possible sale of the property to satisfy those claims.
As to the issue regarding the use of the older form that was changed on Sept. 1, 2017, you do not need to sign a new deed to replace the old one. The new law applies only to deeds signed after that date.
Q: I’m a 58-year-old married woman. My husband and I own a home worth about $150,000 and a piece of land worth around $700,000. I want to leave my half to my adult children. My husband thinks he should receive everything upon my death. He has no children of his own. Can I write my own will or do I need a lawyer? My husband says if I do this, he will just hurry and sell everything before the kids can do anything. Can he really do that?
A: You can certainly attempt to write your own will, but it is better to hire an attorney to prepare one for you. You will also need powers of attorney and medical documents, and in some of the forms, you should not name your husband as your agent.
Importantly, even if you give your children half of your homestead, they can't force your husband to move out, and they can't force a sale to collect their half.
If you should die first, your husband will have a difficult time selling any real estate titled in both of your names because a title company will want both of you to show up for the closing. Even if he did somehow sell the properties, your children would have a very winnable lawsuit against him.