Alaska Adopts Real Property Transfer on Death Act

Alaska’s Uniform Real Property Transfer on Death Act Signed Into Law

On April 23rd, 2014, Alaska Governor Chris Parnell signed Alaska’s Uniform Real Property Transfer on Death Act into law. Alaska is poised to join the 12 other states that have already adopted the Uniform Law, with an additional 11 states and the District of Columbia also having some version of the statute, making 25 national jurisdictions that allow real property owners to transfer their assets upon death, without their heirs having to go through probate. An additional 3 states have introduced legislation this year.

State Representaive Max Gruenberg (D – Anchorage)  introduced the bill (AK HB 60), which was passed unanimously by both the House and Senate and sent to the Governor’s desk for his signature. The bill is set to become effective as of July 21, 2014. Here’s what the bill’s sponsor had to say about it:

“The last thing a grieving family wants to deal with is a drawn out court process just to honor tMax Gruenberghe wishes of their deceased loved one…This legislation allows Alaskans to transfer property without expensive legal counsel by pre-arranging property transfers so their loved ones can work through the grieving process without the burden of unnecessary legal proceedings.”

Transfer on Death Deeds, also known as Beneficiary Deeds or Ladybird Deeds, are a valuable estate planning tool. While some estates are too complicated for a TOD, these documents allow for families to save thousands of dollars in legal fees, not to mention the emotional strain of the ordeal. Docprepper.com is happy to assist you in preparing and recording a Transfer on Death Deed! Call (855) DOC-EASY with any questions!

What states are community property states?

Community Property States

Credit: sXc

Credit: sXc

We’ve often been asked the question:

What states have community property laws?

Well, that’s easy! In the US, there are currently nine community property states. They are as follows:

  • Arizona
  • California
  • Idaho
  • Louisiana
  • Nevada
  • New Mexico
  • Texas
  • Washington
  • Wisconsin

In these states, the acquisition of property is treated differently when you’re married… and it’s something you need to consider even if you don’t live there.

For example: if you purchase rental property in Arizona but you live in New York, Arizona State law will take precedence! And by default, in Arizona you and your spouse will own that property together as “community property“. If you want to keep it separate from your spouse he or she must sign a Disclaimer Deed simply stating you will acquire it as your “sole and separate property” on the deed is not enough!

On the other hand, Arizona will not give you the “right of survivorship” by statutory default. So unless you and your spouse clearly indicate it’s your intention to acquire title as “community property with right of survivorship” on the deed and have both your signatures notarized, your estate will be subject to probate! If you need assistance changing the manner in which you hold title to real estate, just let us know. We’re happy to help!

 

Ways to Hold Title to Real Property in Arizona

Ways to Hold Title to Real Estate in Arizona

To download a PDF version of this post, click here: “Ways to Hold Title In Arizona“.

 

 

Credit: UnknownCOMMUNITY PROPERTY

Because Arizona is a community property State, there is a statutory presumption that all property acquired by husband and wife during the marriage, except property acquired by gift, devise or descent, is community propertyCommunity property is an estate of co-ownership between married persons only. Neither spouse, acting individually, may transfer or encumber real estate that is vested as community property.  Upon death of one of the spouses, the decedent’s interest will pass by will (if one exists) or intestate succession (if no will exists).

COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP

A Community property estate between married persons that vests the title to real property in the surviving spouse provided it is expressly declared in the deed.  This vesting has the tax benefits of holding title as “community property” and the ability to avoid probate through “survivorship rights”.

JOINT TENANCY WITH RIGHT OF SURVIVORSHIP

Joint Tenancy with right of survivorship is a method of co-ownership that gives title to the real property to the surviving tenant(s) upon death of a joint tenant owner.  Title to real property can be held in joint tenancy by two or more individuals either married or unmarried.  If a married couple acquires title as joint tenants with the right of survivorship, they must specifically accept the joint tenancy to avoid the presumption of community property.

TENANCY IN COMMON

Tenancy in common (or tenants in common) is co-ownership where parties do not have survivorship rights and each owns a specific undivided interest in the entire title. For example, one party could own “an undivided 25% interest” while another 2 parties own 60% and 15%. It’s important to note that this can be combined with other ways to hold title, e.g. JOHN SMITH and JANE SMITH, husband and wife as community property with right of survivorship as to an undivided 50% interest. They would be “tenants in common” with whoever else were on title, but their 50% interest would be “community property with right of survivorship“.

TRUST (WITH A TRUSTEE)

Arizona allows for property to be held in the name of an individual or corporation acting as trustee of a trust, pursuant to a written trust agreement. The name of the trustee, trust and date of the trust agreement must all be declared as grantee. (Also, Arizona law requires that the names and addresses of the trust beneficiaries are disclosed when transferring property into or out of a trust.)

SOLE AND SEPARATE PROPERTY

Sole and separate property is real property owned by a spouse before marriage or any acquired after marriage by gift, devise, descent or specific intent to hold the title separate from the marital community.  If a married person acquires title as sole and separate property, his or her spouse must execute a disclaimer deed.

CORPORATION

Title may be taken in the name of a corporation provided the corporation is duly formed and in good standing in the State of its incorporation.

GENERAL PARTNERSHIP

Title may be taken in the name of a general partnership duly formed under the laws of the State of the formation of the partnership. A partnership is defined as a voluntary association of two or more persons as co-owners in a business for profit.

LIMITED PARTNERSHIP

A partnership formed by two or more persons under the laws of Arizona or another State and having one or more general partners.  A certificate of limited partnership must be filed in the Office of the Secretary of State, a certified copy of which must be recorded.

When will my deed transfer show up on the county website?

Photo Credit: iStockPhoto

Photo Credit: iStockPhoto

I transferred the title to my property, but the county records still have the old information online! What happened? Was I ripped off?!?!

Whoa, calm down friend! Although it’s not outside the realm of possibility your deed was unintentionally or maliciously unrecorded, there’s a far more likely explanation we should explore first:  delay. Most counties take a bit of time to update their publicly available records (assuming they even have publicly available records). So before you jump to conclusions, give the county recorder, clerk or registrar a call and ask them how to get a copy of a recorded document. It’s usually pretty simple.

So how long does it take the county recorder to update their records?

As soon as document is recorded, it’s officially in the public record. Organizations like professional title plants gather and index information about recorded documents, and are usually current within several days (although the public usually doesn’t have access to this information). Many counties also have recording information publicly available on their website, and this can take anywhere from a few seconds to a few months to update. For example, here’s an excerpt from the Maricopa County Assessor‘s website:

The Assessor receives over 400,000 documents from the Recorder‘s Office each year, however you can expect that an ordinary house on a subdivision lot purchase could take 6-8 weeks after recording before the change displays on the web site. Purchases outside of a subdivision (mete/bounds legal descriptions or splits of property) take longer unless the Assessor‘s parcel number of the property is included in the legal description on the recorded deed.

(Here’s a link to the Maricopa County Assessor‘s search page – usually a couple of months out of date.)

Isn’t there a faster way to find out if my document has been recorded?

Usually, yes! Every county has a unique identifying number for each recorded document. If you have access to this number (it will usually be stamped or otherwise shown on your original document) you can call the county and they will verify it has been recorded. Maricopa County, Arizona, has a website that allows you to input and see a recorded document immediately after it’s been recorded (here’s a link to that website). So if you need to check and see if something has been recorded, don’t just freak out on your escrow officer, legal document preparer or friend that “supposedly” recorded your document! Make sure you’ve allowed enough time to pass, and a phone call to the local recorder never hurts.

Quitclaim Deeds: When You Should Use Them

Photo Credit: Stock.X.Chang

Photo Credit: Stock.X.Chang

Quitclaim Deeds: When You Want To Use Them.

In a previous post, we discussed the Top 3 Reasons Why You Shouldn’t Use A Quitclaim Deed. Of course, there are times when it is appropriate to use a quitclaim deed!

The best use of a quitclaim deed is to remove a cloud from the chain of title. What’s that mean? Any time there is a real or apparent dispute regarding ownership interest, liens, encumbrances or any sort of claim against a property we call it a “cloud on the title“.

(In the event you are unable to remove a cloud on title with a quitclaim deed, you may have to file a Quiet Title Action.)

Removing a person from title

For a most title transfers, using a quitclaim deed isn’t the best idea (for reasons already discussed). But sometimes, a quitclaim deed does exactly what you need it to do! How do you decide when it’s appropriate to use a quitclaim deed? One helpful way to ask yourself whether or not the party you’re removing from title was supposed to be on there in the first place. 

Let’s assume, for a moment, the following:

  • You are married. (Congratulations!)
  • Your parents own property in a community property state.
  • Your parents want to transfer that property to you as your “sole and separate property”. (You have been married for years now… when are they just going to accept your spouse as a member of the family already?!)
  • You are named in as a grantee in the deed, and it even says “as sole and separate property”. (Or alternatively your marital status is not disclosed at all.)
  • Your spouse never signs a disclaimer deed.

In this situation, your spouse actually owns half of your interest! Because you were supposed to be the only one on title, it would be considered a “cloud” and a quitclaim deed would be the perfect instrument to clean things up.

If title was intentionally conveyed to you and your spouse together and one of you wants to be removed, you might want to consider signing another document such as a Special Warranty Deed. It might just save you some trouble down the line.

Photo Credit: SXC

Photo Credit: SXC

Boundary Disputes

Sometimes, the boundary at which your property stops and the adjoining property begins is not so clear! A common boundary dispute arises when a survey reveals that a fence (or other structure) has been built on what turns out to be the neighboring property. This is called encroachment.

An easy way to fix the situation would be for your neighbor to simply quitclaim “the west 5 feet” (or whatever part of their land your fence is on) to you, thereby resolving the encroachment. Of course, you can’t force your neighbor to simply give up their land… but asking won’t hurt! (You might remind your neighbor they benefit from the fence as well. Also, a bottle of wine and a compliment sure couldn’t hurt!) 

If your neighbor is unwilling to quitclaim the portion of land in question to you, you could also sign and record an encroachment agreement. This will disclose publicly how the parties resolved the encroachment issue and offers some additional protection.

If nothing else seems to work, you might have to bite the bullet and take down the structure. There’s only so long you can fence with someone over a fence!

Adverse Possession

Because quitclaim deeds don’t make any guarantees of ownership, they can also be signed used to prevent cases of adverse possession.

What if you have been using your neighbor’s driveway for years? You know the driveway isn’t yours, they know it isn’t yours, but now your neighbor is selling their house… A potential new buyer comes over and sees that you have been using the driveway as your own! The new buyer becomes concerned about you claiming the driveway for yourself through adverse possession law.

In this situation you can execute a quitclaim deed to show for the record you don’t have any rights to the driveway. That prevents any adverse possession claim and satisfies the new buyer. (You may not enjoy the use of the driveway anymore, but hey… your neighbor was nice enough to give you the west 5 feet of his property over that fence dispute, remember? It’s the least you can do!)

Photo Credit: SXC

Photo Credit: SXC

Are you a grantor (seller) with something to hide?

We have to at least address the possibility that you could have some unscrupulous motivation for using a quitclaim deed. After all, this is what a title company is afraid of when they see a quitclaim deed where another instrument should be!

You want to sell a piece of property. You have a buyer and have convinced them everything is on the up and up… except there’s a problem:  You are about to get a judgment against you. Or, there’s an unrecorded lien against the property you know about. Heck, maybe you actually already sold an undivided 50% interest to someone else… in all of these cases, you’re a scumbag that is trying to hide the truth from the buyer and you think you should use a quitclaim deed so they can’t sue you later.

Will it cause you more problems down the road? Definitely.

Do we recommend this as a course of action? Never.

Shame on you!