By James W. Mallonee
I’ve recently had two situations arise that cause me to author this article for the purpose of informing you what not to do when it comes to making real estate titling decisions. The situation is as follows: Prior to getting married, two individuals (I’ll call them Mom and Dad) purchased a property. The property was titled in their names but designated its ownership as Tenants in Common because no specific identification as to how each party’s interest would be held (e.g. joint tenants with right of survivorship) was stated in the deed. The deed was subsequently recorded in the public records.
Four days later, the deed was changed by typing in Joint Tenants with Right of Survivorship. However, the deed was not re-signed by the Sellers, witnesses or notary public; it was however, re-recorded without anyone re-signing.
Mom and Dad could have recorded their own deed conveying their interest to themselves as Joint Tenants with Rights of Survivorship rather than re-recording, but this did not happen. By failing to re-execute the deed by the Sellers or having Mom and Dad conveying their interest to themselves, the second recorded deed became worthless.
Mom and Dad eventually got married, but nothing was done about the second deed. Both parties had children from a prior relationship. Mom predeceased Dad by about 10 years; Dad subsequently executed a trust instrument following Mom’s death and within the instrument he conveyed the real estate to his own children and the step-children in equal shares. Clearly, the intent was to provide for all of the children equally. The problem is that the second deed was a 20 year ticking time bomb that was about to go off at the death of Dad.
Dad eventually dies and at first glance the first and second deeds appear to be legitimate, except when you see the new recording stamp and the recording date differences. The second deed was an exact copy of the first, but with additional language trying to identify Mom and Dad as Joint Tenants with Rights of Survivorship. The second deed is invalid because it was not properly re-executed prior to being recorded. With the second recording of the deed being illegitimate, we turn back to the first deed and playout what will happen 20 years later.
Remember that the first deed is titled as Joint Tenants in Common. Thus, at Mom’s death, her estate takes on a ½ interest in the property. What makes this so interesting is that at the time of Mom’s death, the parties were then married. Because there was no Will executed by Mom conveying her interest to Dad, Dad takes a life estate in her 50% ownership with a vested remainder to Mom’s children. There was no probate performed at Mom’s death because the parties were under the assumption that at Mom’s death, the property, by operation of law, would pass to Dad (which it did not due to the fact that the second deed was invalid).
The story gets more complicated when Dad (following Mom’s death) transferred what he thought was the entire interest in the property to his Trust, but in fact, it was only a 50% interest because Mom and Dad failed to properly re-execute the deed 20 years earlier. Fortunately for Dad, Florida law provides that Mom’s failure to execute a Will makes her estate intestate. The intestate laws state that in a mixed marriage of children, Dad would receive 50% of the Mom’s estate, thus, Dad’s overall interest in the estate increased to 75% and Mom’s children’s interest became 25%.
Mom and Dad’s clear intent (as stated earlier) was to treat the children from both sides equally. Dad’s trust fulfilled that intent by giving everything to the children from both sides of the family in equal shares. But Mom’s side of the family is about to get more because of the failure to re-execute the deed when it was improperly changed 20 years earlier. Mom’s estate is now administered giving her children 25% of the property. But it gets better, because Dad included all of his and Mom’s children exclusively in his trust instrument, Mom’s children get the additional 25% to the exclusion of Dad’s children. Does this seem fair? Of course not, but the blame rests on Mom and Dad who took it upon themselves to cut a corner without seeking a legal opinion on what could happen 20 years out in time.
The question now is, how does this get resolved? The answer is through a quiet title action which is going to cost (in attorney fees) more than the amount Mom’s children are going to receive in the value of the property. This could have been avoided if Mom had executed a Will of her own or Mom and Dad had properly reconveyed the property to themselves as Joint Tenants with Rights of Survivorship. Either one would have worked and all of these problems avoided.
So what is the message here? Prior to conveying property, if you are not experienced in deeding property and understand the long-term effects your actions may have, seek out the attorney of your choice and discuss the proper procedure to ensure what you want to have happen, does in fact happen. Clearly, the intent in this case was to treat all of the children equally, but that did not happen. The message is, don’t cut corners.
This article is intended for informational use only and is not for purposes of providing legal advice or association of a lawyer – client relationship.
James W. Mallonee, P.A.
946 Tamiami Trail, #206
Port Charlotte, FL 33953
(941) 206-2223
871 Venetia Bay Blvd., #225
Venice, FL 34285
(941) 207-2223