REAL ESTATE INTERESTS IN PROBATE AND NON-PROBATE – PART 4
By Cary A. Lind
This series of articles will conclude with a discussion of three issues.
Heir in Possession
Mom and Dad live in the house with do-nothing son, Joe. Dad dies, Mom dies, Joe refuses to move. What do you do?
First, you should look at §20-1(b) of the Probate Act. That section states that you cannot take “possession of real estate or the portion thereof occupied by the heir or legatee thereof as his residence” unless you meet certain requirements. Those requirements are that the decedent’s will provides otherwise “or unless the court at any time finds that possession is necessary for the payment of claims, expenses of administration, estate or inheritance taxes or legacies, the preservation of the real estate, or any part thereof, or the proper distribution of the estate.” If you fit within any of those requirements, you can then divest the heir or legatee of possession. In most estates, the house is the major asset and needs to be sold both to pay claims and to make proper distribution. In that case, possession will be necessary as a preliminary measure to sale.
While any Probate judge has inherent jurisdiction to handle an eviction proceeding, most do not want to. I have found it more expeditious to bring a separate Forcible Entry and Detainer action in the court that routinely hears those cases. You first need to bring before the Probate judge hearing the case a motion for leave to file a Forcible. Once permission is granted, you can then proceed with the Forcible. After the heir is removed from the premises, you can then take whatever further actions are necessary.
Exoneration of Encumbered Interests in Real Estate
The decedent makes a specific bequest of his residence to one of his children. The residence has a mortgage on it. The will also contains the usual language directing the executor to pay the decedent’s just debts. Does the Executor have an obligation to pay off the mortgage on the real estate? May the Executor pay off the mortgage on the real estate? Does the child take the real estate subject to the mortgage?
§ 20-19 of the Probate Act answers the questions. There is no exoneration of the debt, and the legatee takes the real estate subject to the mortgage as of the date of death. Further, if the representative pays part of the debt, the representative is entitled to reimbursement from the legatee or alternatively to a lien against the real estate for the money so spent.
The opposite result can be directed, but the will must contain more than the general language about payment of the decedent’s debts. If the intent is to pay off the mortgage and that intent is made clear in the will or trust, then the direction will be honored.
“Dresser Drawer” Deeds
The decedent gives a deed to his home to one of his children and then instructs the child not to record the deed until after his death (perhaps so the other children will not find out and complain). The child dutifully follows his father’s instructions and records the deed several days after his father dies. Is that a valid conveyance?
The answer is almost certainly “no.” A case decided in 2000 specifically addressed the issue of “dresser drawer deeds” and found under similar facts that there was no valid conveyance. That decision was based on the fact that there was no “delivery” of the deed, since the purpose of the father’s giving the deed to his son was not to pass title at the time the document was given to him. In that case, the title holder was a land trust, making the lack of delivery even more glaring, since the document was never delivered to the land trustee, the only party that could actually pass title to the grantee of the deed. The court did suggest that there might be circumstances under which such a plan could be carried out, i.e., where the deed was delivered to a third-party escrow agent with instructions to record the deed after death. Under those facts, the court said that there would probably be a delivery, although the agent would have to overcome the prima facie case against delivery by showing the terms by which the deed was to be delivered by the third person to the grantee and that those terms had been complied with.
©2002 by Cary A. Lind, all rights reserved.