One thing that everyone on this planet has in common is that at some point, we all die…Now, I don’t mean to start this out morbidly—but it’s true. Another commonality that I’ve noticed is that a good portion of people don’t have an estate plan. No will, no trust, nothing. Basically—most American’s are leaving their estate in a mess for their heirs to figure out.
So, how does this relate to real estate? Well—even if the estate is left a mess, we can still take care of the real property with a document called an Affidavit of Heirship.
In Texas, when someone passes away without a will it’s called passing “Intestate”. Generally, in order to take care of one’s estate, you need a will or a trust to probate/administer. But without one, there are few options for what to do. While it is possible to open up an administration of an estate without a will, it can be costly and time consuming. That’s why most families will choose to do an Affidavit of Heirship to gain control of their deceased loved ones real property when they passed intestate.
The Affidavit of Heirship (“AOH”) is a tool that all real estate investors should be familiar with. I’ve had many clients come in with deals they think are unsolvable because someone has passed away with no will, leaving a number of heirs. But, luckily, we’ve been able to solve most of them with an Affidavit of Heirship.
When it comes to obtaining the information needed to complete and prepare an AOH, it is important to know what your title company/underwriters want. The information and requirements can be different from underwriter to underwriter, but there are some pieces of information needed across the board. Marital history of the decedent is extremely important, as well as family history—names and birth dates of ALL children had by the decedent—whether children are from the current spouse or not. The affidavit must also be signed by two disinterested witnesses that knew the decedent for at least 10 years.
Once the relevant information is received regarding the decedent and their history you can determine who the heirs to the estate are. The Intestacy laws of Texas (found in the Texas Probate Code) dictate how the estate of one passes when no will is present. Real property transfers differently depending on the “nature” of the property—whether it’s community or separate property. The law is also different depending on whether the decedent passed away before or after September 1, 1993. Linked here is graphical interpretation of how real property passes in Texas under the laws of intestacy after September 1, 1993.
Once you have determined your heirs and completed your AOH with your attorney, the AOH should be filed in the real property records of the county the property is located. This gives notice to everyone out there who the heirs to this property are—and, in general, once an AOH has been on file for five or more years, the facts stated therein are taken as true. Once the AOH is signed, notarized and recorded, the heirs of the property can then sign off on the sale of the property.
While I know a lot of investors out there like to save money by preparing their own docs, I highly advise to avoid, at all costs, Affidavit of Heirship forms found online. Not only are they wholly insufficient, you’ll likely need to redo it at a later date due to your title companies underwriting standards. So, skip the hassle, and get it done right the first time with your attorney.
Along with the chart included in this blog, I have an Affidavit of Heirship questionnaire on my website that helps begin the process of drafting the affidavit and getting the information needed. As well, I have Will questionnaires should you or someone you know want to get ahead of your estate and have a plan in place should the inevitable happen unexpectedly.
Heirship issues can be tricky, but they aren’t impossible. Once you get the hang of the laws that dictate heirship, you will have a better idea of what you’re dealing with before you get a property under contract. If you ever have questions, I’m happy to help! As always, I’m here for you, from contract to close.
Disclaimer: the information provided in this article is for general educational purposes only and is not to be considered legal advice that anyone may rely on. Every situation is different and if you have a legal issue you should consult an attorney or related professional regarding the specifics of your individual circumstance. This firm does not represent you or anyone else unless it is expressly retained in writing to do so.