Is it better to walk away and let the county foreclose on the property to get their taxes?

Hi Igloo572.

I researched the muniment of title but according to what I read there has to be a will which there is none that I'm aware of. The independent probate would be out of the question for us, again, because of the issue of no will. The research I did indicated that when there is no will involved it most always will need to be handled as a dependent administration. The attorneys we have seen are really unfamiliar with this territory as it really needs to be handled by a Certified Elder Law Attorney due to the MERPS issue and there are none where we live. We also have decided to not spend anymore on attorneys, etc.

Yes, we have been advised that we could do an Affidavit of Heirship. The problem with that is that all heirs would need to sign it and we're really not sure how that would go. My mom has to decide how she wants to handle this. I believe she will be going to Medicaid this week to find out what options, if any, she has. Thanks for the assistance.

My take on probate is that you need an atty no matter what & I'm currently in independent admistration probate in TX. If doing a muniment of title is an option to settle & transfer the asset then maybe just maybe if you are very very comfortable in a courthouse and assets of the estate are small & uncomplicated then yeah you could on your own do a muniment - these are under 1k and maybe 3 or 4 courthouse runs. independent administration is pretty straightforward sequence of events, costs vary but avg is about 3k. For dependent administration, your right is that it's court overseen as every action needs probate staff verification & you may need to be bonded as well & expect to have in-chambers hearings but also a lot of probate attys. will NOT do dependent administration probate so you may need a atty who does litigation AS WELL as the usual transactional aspect of probate. Litigation practice guys will change more.

Did anybody suggest doing it as a lineal heirship? TX allows for those. If no valid will, a lineal could be something for you all to look at. Now all heirs must be wanting to sign off and prior marriages need to be with settled legal but a lineal is pretty reasonable in costs.

Also for estate recovery for TX, state Medicaid program has an outside contractor -HMS - who deals with MERP.

Thank you for the info.

Actually we were informed that a probate can be done but it would have to be a Dependent Administration because there is no will that we are aware of. This kind of administration is quite a lot more expensive since the court has to oversee all transactions, etc. and would require atty. So, we'd be paying court costs and atty. fees. We have already spent too much money on this whole thing and there are no Certified Elder Law attorneys here which is what we really need. My mom is going to go down to Medicaid this coming week to see if she can sign her half over because this has now affected her Medicare part D. If not, I don't really know if she can sign or deed it over to the county. We're hoping she can sign it over to Medicaid. Let them worry about everything. This has been extremely stressful, time consuming and expensive. We're both pretty much done.

I do appreciate everyone's help and responses.

NeedHelp - If there is no valid will, then TX probate cannot be done. It will be a lineal heirship needed or estate escheat to the state.

As far as property taxes & tax sale situation...for TX is pretty convoluted for both the property owner & for investors wanting to buy at tax sale. TX counties tend to place interest & also atty fees onto the property which the owner or family can pay off years later without worry of the property ever going to tax sale redemption. For my TX aunts estate, there was land from prior marriages decades delinquent which actually wasn't too too much money to clear. A lot of TX is nonproductive ranch land with no oil & gas pass through so low value. TX is a lousy state for actually acquiring property at tax sale; interest yes but actual redeption not often. Most states don't take this approach & have tax sale done annually & want property to be redeemed. Like MS is last week of August statewide & after 3 consecutive years of delinquency whomever holds first year position can file in chancery court, pay off year 2 & 3 and get redemption via tax sale; usually afterwards get a Quite Title action done to guarantee ownership if development done but you definitely own the property, transferred to your name, tax assessor issues bill to you; all in for MS in my experience takes about 4 years. For TX after 4 years, your probably at the point where county is just placing attys fees onto the delinquency.

Too many posts to read them all. Go to the township where the land is. Ask them how to handle it. Can you turn over the land to them. If Medicaid is involved, can u turn it overto them? Without a will, the court may have to determine who are those who inherit.

Thanks all for answering. Yes, my mom got the actual deed but now she said it's saying something different than it had been before. Not sure what this means. She was finally able to reach an actual person at Legal Aid this morning and they informed her to call on Wednesday morning to see if she qualifies.

Well, theoretically and technically you're not an heir in reality until the person dies. Prior to that, you're a named heir, to actually be an heir on death of the testatrix or testator or settlor of a trust.

I think the issue of who's liable for property taxes turns on who holds title pursuant to a validly executed and recorded Warranty, Quit Claim or C Deed.

In your case, I don't see how someone who doesn't hold title pursuant to a legitimate deed could be responsible for taxes, but Texas is a different type of state and there could be some nasty law hidden away someplace. You might have to do some research on this, or even just ask the county treasurer's office.

Sorry but I have no experience with Texas Disclaimers of Interest and their scope, so I wouldn't want to try to answer a question without having the time for adequate research. I do think though that a disclaimer of interest would be specific in identifying what you're disclaiming as an interest, i.e., not general or vague.

This is the Texas statutory section; be sure to check out Section 240.002 as referenced as there may be conflicting language.

statutes.legis.state.tx/Docs/ES/htm/ES.122.htm

BTW, did your mother check out the deeds at the county courthouse?

Heirs, no, but the county forecloses and sells the property at the county tax auction to recover the unpaid taxes. You also need to know how much MERP wants, as that is a lien on the property as well. So if both of those exceed the property value, no heirs get anything and there is no need to disclaim.
Please remember the Executor only distributes the remainder. In your case there may not be any remainder to be given.

Hi again. I was just wondering if anyone knew if heirs can be responsible for property taxes if there names are not on the deed? I really don't think so but wanted to check here. This is in Texas. I'm worried I can be held responsible for something and am thinking of doing a Disclaimer of Interest. Does anyone have any experience with those? Also, if I do decide to do a disclaimer, could I still be the Executor or Administrator of a probate if my mom needed me to? Thanks.

If there are no local attorneys in the elder law practice area close to you, search for firms in the closest large city. I always look at the state bar association directory and identify firms with the practice areas that I need.

However, this situation is both a real estate and an inheritance issue; I would look for a firm with attorneys in both practice areas; they can work together, each in their own area of expertise.

I remember from my commercial real estate days that some states don't use the "Warranty Deed" terminology.

Thanks for the info. You've been very helpful. My mom is going to their office this afternoon to find out how the deed is titled. The old one that my father had, said Warranty deed but when you go online it has both my parents name and it says Deed of Trust. Anyway, she is looking into it this afternoon.

When you mention about the heirs relinquishing rights in the property, this was actually something I found when I had done research myself. I was afraid that because I was an heir I could be held liable for these taxes or whatever, but I don't think so because my name is not on the deed. What I found was a Disclaimer of interest form and from what I've read, an individual has 9 months from the time of death to disclaim.

As for my father not paying taxes, I guess I shouldn't have called it a waiver. If I understand it correctly, because he was older than 65, lived on the property, and was on Medicaid, had health issues, etc. they couldn't foreclose on the land and make him leave even though taxes kept accruing. The whole situation changed when he moved away in 2013. Then the county, etc had a right to expect payment. The tax office is aware of my mom's age, but since she doesn't live out there, it doesn't really matter.

As for the heir in question and "it also requires some chocolate to figure out" LOL. Well I'm a great baker.....technically Pillsbury and Duncan Hines are. LOL. Supposedly we heard that she had a will but it wasn't signed. I believe the title company asked for it to be provided, but it never was. I think if there had been one, this would have made the sale go through back then. I also think if there was one, she would have opened probate on her own by now. We have looked into our county and the county my father passed away in, and to date there hasn't been one open. It would seem reasonable to me that if an individual had a legitimate will to someone's estate, they would pursue it or at least record it with the courts. Just my opinion. Not really sure how that works.

Now we are the wiser and know that if we were to open a probate, we would need an experienced Certified Elder Law attorney. There are none locally, but I have looked into websites in Texas. We're really trying to avoid anymore costs but I will look into the pro bono/estate planning attorneys.

Anyway, I know this is a huge mess.......but I truly do appreciate the extra knowledge that I've received so far. It may be as easy as what pamstegma suggested and just open a probate myself...............and let the chips fall where they may. Honestly, this is not something I want to do. We will definitely look into the Deed in Lieu and thank you for that information! :) The ultimate decision lies with my mom and how she wants to pursue/handle the situation.

Just a partial response ... your answer provided a lot of helpful information, but the situation is a lot more complex than I realized.

In order to determine how the deed is titled, go directly to the register of deeds, or similar office in the county and get copies of the deed(s). The assessor's office may have copies (I don't know) but it also has a different focus. From experience, I would NEVER rely on any tax office for determination of how title is held - it can be a complex issue and you need to get copies of the actual deeds from the county source at which they're recorded. Assessor's staff would I doubt be able to figure out a situation this complex.

E.g., the house next to me has been abandoned for years. After the last family member living there died, no one in the family wanted the place because their relative was such a slob and they knew the house would be a big mess. The illegitimate son didn't even know if his father had a will. Probably not - he was a junkie and alcoholic.

So under intestacy laws, it wasn't even clear who would inherit, but what should have been done is that any potential heirs waived their rights so the property could be foreclosed. I haven't done any research to determine if there's a period by which potential heirs need to relinquish or accept their rights in the property.

There were 3 mortgages, the first (priority) was held by MERS as proxy for an unknown, unidentified lender. Foreclosure was begun, then canceled. The foreclosure attorney ignored my call so I never did figure out who that first mortgage lender was.

A deed was then recorded to Flagstar; the bank has never done anything to maintain the property and wouldn't respond to my e-mail or call.

The City's been responsible for mowing and snow removal for years.

In the meantime, there are enough defaulted property taxes for the county to acquire the property, but I was told by one of the code enforcement guys that the county merely deeds it back to the city.

Last time I checked, even the Register of Deeds office couldn't determine ownership - a clerk said it was still owned by the dead guy. I don't even recall what the city's tax assessing office listed as ownership.

And, in the meantime, the dump still sits there, looking more and more like the evil witch's hovel from the Hansel and Gretel story.

I am still confused though over your father's not having to pay taxes. If there was a complete waiver for anyone over 65, then no taxes should have been accruing and become delinquent until his death, but then should have been reassessed based on your mother's age. I'm wondering if the local treasurer's office is unaware of your mother's age.

However, it might also be that the provision you partially quoted only allowed certain relief from taxes, such as a rebate (which exists in Michigan). In that case, your father would have had to file a Texas tax form in order to get that rebate, but by not paying them, they continued to accrue and become delinquent.

I think there might also be a question of validity of the deed from which your father took title since it was misrepresented that he was a single man. However, unless someone can prove there was deliberate intent to misrepresent his status, I'm not sure if anyone has any claim, especially since your mother was awarded 1/2 the property through divorce.

I wouldn't normally suggest this but it might be worthwhile for your mother to consider filing bankruptcy, or at least notify the treasurer's office that she lacks the ability to pay the taxes. (See the comment below on deeds in lieu) Otherwise the back tax debt could cripple her financially.

The issue of the daughter w/o your father's name on the birth certificate is way beyond me except that there doesn't seem to be any legal lineage there, which might put into question anything she did. To me, this sounds like a fraudulent claim on her part. It also requires some chocolate to figure out - I've never encountered anything like this and need some mental clarity.

I'm thinking that maybe one of the resident attorneys could offer some suggestions. But I honestly don't see how you can avoid another attorney getting involved; however, I think that the ones involved before really weren't in the right practice groups and this was probably way over their heads.

I also really, seriously, would raise the issue of a "deed in lieu" to the tax office to avoid incurring attorney fees. This property could literally bankrupt your mother.

A deed in lieu works this way, and was used decades ago by commercial lenders in lieu of foreclosure. I believe it was also used during the recent real estate market collapse.

The fee holder (as titled on the deed), executes a Quit Claim Deed, or perhaps Deed C, to the lender. The lender agrees not to foreclose and may waive certain or all accrued delinquency and fees, in exchange for the Deed in Lieu.

The goal is for the fee holder to just give up the property and avoid negative credit ratings as well as incurring foreclosure fees. The lender in turn gets title to the property w/o foreclosure, which in some states is "in equity", i.e., through litigation.

I remember these transactions being used back in the early 1970s during a commercial real estate downturn. The firm I worked for handled them for major lenders, and helped accelerate the return to productive use of the land since the lenders typically hired their own construction manager and subs to finish the build and market the property for sale.

I'm going off to think about this and see if I can sort it out, but if i were you, I would get copies of the deed from the county office ASAP.

As to attorneys, have you attempted to locate any pro bono real estate and/or estate planning attorneys who might offer to help out?

Thanks for taking the time to explain the situation. I'm going to try to think what we would have done if encountering a similar situation when I worked for commercial law firms.

Thank you GardenArtist for the input. I appreciate any help I can get at this point. Okay, let my try and answer some of your questions with what I know.

1. The sale of the land was in Texas and had been listed with a Realtor. It was already going through with the title company but they were informed of his death and stopped right there. They said they would need all the heirs to sign for his half - Affidavit but the title company strongly recommended to see an attorney, which we did. There were different suggestions - Affidavit of Heirship and Probate. We couldn't do anything at that point because we still didn't know exactly what happened to my father, couldn't find anything out and didn't have a death certificate. This took months.

2. When he left in mid-2013, he moved to a different Texas county and gave his daughter Medical Power of Attorney. We were informed that when he passed away, this power of attorney ended. This is where it gets even more confusing. My father's name is not actually on her birth certificate so there is question as to whether she is a legitimate heir or not. We also heard that she had a will but it wasn't signed, therefore making it invalid. We do not have any contact with her and preferably don't want to due to the the way things were handled when my father left and how he passed away. She never informed us of his death and later even wanted to continue with the sell by having my mom do a "quick claim deed" where we went to see another attorney because we didn't know what this was and my mom was advised this would not be a good idea so she didn't do it.

a. As for how the property is titled.....excellent question. I will have my mom contact the tax office and find out. However, when my dad bought the property he was married to my mom but stated that he was a single man. Yes, by now you're thinking....wow....this is a really dysfunctional situation, which it was. This was why they eventually separated. So technically the land was in my father's name but the divorce decree awarded her half. She was informed to record her divorce decree with the court so it would be considered her deed to the land which she did.

As for back taxes,

1. My father didn't need to pay them since the tax office has a waiver or something like "if you're over 65 years of age or older or disabled......" . I'm not exactly sure how delinquent the taxes are, I think some were paid and some weren't like the school taxes. My mom borrowed money to pay some taxes but didn't have enough to pay all so she got on a monthly contract but has fallen behind some months and the contract is no longer valid. Like I mentioned before, she is 70 and on social security but has been trying to maintain the land by mowing, paying taxes, etc. I'm trying to help but honestly my main concern is supporting her and I.

2. The value of the property was appraised at 69k but that was before. It needs quite a bit of cleanup work, etc.

I don't want to see my mom get sued. I've talked to the tax office and they informed me that the interest rate will keep accruing each month and July 1st is where attorney fees will start. I realize that opening an administration (probate) is probably the best option but it is very expensive. This would mean that not only would be mom be in debt but then I would probably be going into debt as well with court costs. This would be a double debt situation which I don't feel would be a wise course especially if the land does not sale or takes awhile. This is a very disheartening situation. I have done extensive research (hard to understand law) but thought I would reach out on this forum and see what knowledge others have they could share. I really appreciate your input and will look into some of the suggestions.

Just did some quick checking on the Texas statute re sale of delinquent taxes. It appears as though the tax sale isn't by advertisement but rather by suit, increasing the cost. It also appears as though the governmental unit has recourse against the property owner for legal fees and costs. This seems quite the Draconian approach.

I think I'd do a real quick calculation of whether or not there's any possibility of even paying the back taxes, and if there's not, contact the taxing unit with an offer by your mother to relinquish her rights in exchange for no pursuit of costs or fees against her. The concept is similar to a "deed in lieu" used by lenders with corporate clients in default on loans. I wouldn't want to see your mother get stuck with costs of a tax lien suit.

There's also the possibility that MERPS may go after your father's interest, if it wasn't automatically vested in your mother's assets at his death.

There are several issues here. I'm going to try to sort them out categorically as there are also a number of unanswered questions.

1. Sale of the land was "in process". Exactly what state of sale? Listed? Offer pending?

2. Your father apparently left no will; I assume there was no DPOA either?

3. "The issue now is my mom cannot sell it because his half is technically owned by us as heirs or that's what we were informed."

This is really dependent on other issues:

a. How was the deed to the property titled? Was it held jointly by your father and mother with rights of survivorship? Barring other Texas laws, if your parents held property jointly with survivorship rights, the property would be now be owned by your mother. And unless there were contingencies, Texas law to the contrary, or other individuals named in the deed, your mother could dispose of it as she chose

b. If your father died w/o a will, he died "intestate". States generally have provisions identifying first, second, etc. order of heirs. This would be statutorily prescribed. I just Googled Texas intestacy laws; there's a chart which if you can enlarge it would be helpful in identifying the tier of heirs who would inherit your father's assets.

If one of the attorneys you saw reviewed this aspect, it might explain why your mother couldn't sell b/c of the interest of the heirs.

c. Who in fact told you that your father's half is "technically owned by the heirs? Was it a Texas attorney? Was it someone who based his/her interpretation on the intestacy laws? If not, what evidence is there that this individual is actually knowledgeable of this kind of situation?

Again, this harks back to how the deed for the property was titled.

As to the back taxes:

1. Do you know how many years taxes must be delinquent before being sold to the county, or state, depending on Texas statutes?

2. How many years are the taxes delinquent? What's the current amount and the defaulted interest rate?

3. What's the value of the property? Do you have an appraisal?

4. At what point would the value of the property be less than the delinquent taxes? (This would require a fairly simple break-even analysis). If the delinquent taxes are already greater in amount than the market value of the property, you may as well let it go to the county or state. You'd lose money redeeming it for the back tax value.

As to potential solutions, the primary issues to address are

(a) whether or not your mother does have sole title to the property or whether there are intestate interests that could complicate any decision she might wish to make disposing of the property, and

(b) the value of the property vs. the amount of the back taxes, and whether or not it's worth it to redeem them.

If any of this doesn't make sense, just post back with questions.

I'm not going to try to respond to the MERPS issue as I just don't have the knowledge to integrate it into an already potentially complex situation.

The forms and instructions were available on the state court website.

Did they teach him what to do? What I mean is I've heard you have to send letters to all beneficiaries, creditors, etc. Did they tell him all the things he needed to do? Thanks.

Well if no one steps forward to be the fiduciary for a small estate with no Will, nothing is going to happen. My husband went down to the court house, filed for fiduciary of his mom's estate. Cost him $1 filing fee and the court appointed him to probate the estate. No fancy lawyers with fancy fees.