What to do when you have 1 incapacitated heir ?
Houston, TX · Member since 2015 · 111 posts · 155 votes
I have a deal property under contract with the sister, however she has 4 other siblings of which 1 is incapacitated in a state mental facility he does not have contact with the family. Is there a way or procedure to be able to buy the property without requiring the incapacitated person's signature or waiving the incapacitated person interest in the property.
The property belonged to the deceased mom. No will.
So the kids get the house traditionally.
Thanks
I have run into this scenario more than once.
First of all, their family problem is their family problem and not your business problem. Keep it that way. You are a business woman and not a social worker.
Before going further, you mentioned the mother died intestate. Has the estate been through probate? If not, quit wasting your time. The heirs can do nothing until then, and without a will, that can take a couple of years. (You may have heard that the worst will is better than no will - that is the reason.)
In the mean time, no one is paying property taxes, no one is maintaining the property, and the property will deteriorate to the point where although it has value now, it won't by the time this all gets resolved, if ever.
But wait, there's more. The probate court will require an appraisal, and the property will have to sell for 80% of appraised value. That not be a number that will work for you so once again, you will be wasting your time pursuing this.
If by some amazing stroke of luck it has been through probate and the property can be sold, you need the family to get together and pick one person to be in charge, and all the others give POA to the family leader. You have to deal with one person. You can never get an agreement with a committee. That includes the mentally incapacitated one. If no one is the POA for that person, you have the same issue as you do with the estate. The State will appoint someone to act on that person's best interest and good luck getting that person to do anything.
Have fun!
The incapacitated heir most likely has a legal guardian and/or conservator appointed by the court. That individual is who you will want to include in any discussions with the other heirs.
I presume your deal is in TX?
The individual probably does not have legal capacity to transact. It's quite possible that no legal Conservatorship for that person's estate has been established, merely for the person (meaning care taking only).
My experience has taught me that trying to get piece fixed is not a good plan. So, I'd avoid it.
Most likely you are trying to accomplish purchasing this property via an informal probate. This technique, when available, only works when all parties have the ability to transact and pass marketable title. Your deal does not.
You could encourage the family to open a formal probate and the administrator sell the property to you during the course of the proceeding with consent of the cooperative heirs. This would likely require court confirmation and the possibility of potential overbidders. That's the risk you take.
Alternatively, you could acquire just the interests available now, which would be fractional and less than 100%, hence not sellable. You would then have to clear title of the fractional interest via Partition and Quiet Title Action. Kind of circuitous way to acquire marketable title but a possible avenue.
Hopefully, you're a real buyer and not someone trying to wholesale an opportunity with convoluted problems and solutions.
I presume your deal is in TX?
The individual probably does not have legal capacity to transact. It's quite possible that no legal Conservatorship for that person's estate has been established, merely for the person (meaning care taking only).
My experience has taught me that trying to get piece fixed is not a good plan. So, I'd avoid it.
Most likely you are trying to accomplish purchasing this property via an informal probate. This technique, when available, only works when all parties have the ability to transact and pass marketable title. Your deal does not.
You could encourage the family to open a formal probate and the administrator sell the property to you during the course of the proceeding with consent of the cooperative heirs. This would likely require court confirmation and the possibility of potential overbidders. That's the risk you take.
Alternatively, you could acquire just the interests available now, which would be fractional and less than 100%, hence not sellable. You would then have to clear title of the fractional interest via Partition and Quiet Title Action. Kind of circuitous way to acquire marketable title but a possible avenue.
Hopefully, you're a real buyer and not someone trying to wholesale an opportunity with convoluted problems and solutions.
@Rick Harmon
Yes I'm a wholesaler, but I never wholesale anything with problems. I always gather all docs cross all t and dot i. Affidavit heirship ,POA amd etc Prepare the closing process and I'm at closing. That's the way to wholesale otherwise anything less is called selling a lead.
Your right and that's what I was thinking about doing just buying from all the siblings no title company purchase. Then quite title. Then resell it.
Do I understand correctly that you have a contract with one of six heirs, and the case is not in probate court?
@Sabrina Kaneundefined
Do I understand correctly that you have a contract with one of six heirs, and the case is not in probate court?
@Sabrina Kaneundefined
Yes correct. .. mom died no will. So house goes to kids they want to sell but 1 kid is incapacitated in mental ward. Can't talk or communication.
The other kids are willing to deed their interest but that 1 kid is the problem. How I need to handle that.
i will preface by comment by saying it is based more on my legal experience, than as a realtor or investor.
At the time of mom's death, she owned real property and the deed is titled in her name; however, a deceased person cannot own real estate, so by operation of law, equitable title, not legal title, passed to her heirs. Heirs that have yet to be determined by a court of law.
Assuming, her six children are her only legal heirs, each owns a undivided 1/6 interest. For legal title to pass from mom to her 6 children, even if a will exist, the estate must be administered in probate court, where the court will issue a deed transferring mom's legal interest to her heirs.
The court will value the property, which can be a low appraisal or the tax assessment value. Heirs can agree to sell their interests. The incapacitated heir will be appointed a guardian ad litem to protect his 1/6th interest in his property rights.
At this point, the siblings do not legally own the real estate, therefore, transfer via quick claim deed, or otherwise, is a gamble. What if other heirs appear after you have dealt with the 5 who agree?
Maybe I am overly cautious. I am absolutely new to taking risks for investments.
BTW, this is my first post reply on BP.
Thanks @Andrea Vanias for that weigh in ... I did a deal last month where Grandfather died no will and he had 2 kids who both died. But those 2 kids had 1 kdi each. I signed a contract with the sister and the brother deeded his interest to sister. We did affidavit of heirship on Grandfather and his wife , as well his 2 kids that passed. We had to get death certificates on grandfather his wife and his 2 kids. There was never a probate.
So Im use to doing these types of cases, but this particular one has a incapacitated heir that cant talk or communicate. He has a case manager that manages his medical care that I do know, so my next move was to try to contact the case manager at the ward and see of she can shine some light on this, matter.
every deal is a mystery and you learn alot lol - I love cracking cases. :)
I learned something new, an Affidavit of Heirship, to transfer property in cases without a will. Yes, it's clear how it could expedite matters. When you sell the property, is the buyer given a general warranty deed and able to obtain title insurance?
If you continue with this deal, it would be interesting to know how you handle the incapacitated heir.
Thanks,
I have run into this scenario more than once.
First of all, their family problem is their family problem and not your business problem. Keep it that way. You are a business woman and not a social worker.
Before going further, you mentioned the mother died intestate. Has the estate been through probate? If not, quit wasting your time. The heirs can do nothing until then, and without a will, that can take a couple of years. (You may have heard that the worst will is better than no will - that is the reason.)
In the mean time, no one is paying property taxes, no one is maintaining the property, and the property will deteriorate to the point where although it has value now, it won't by the time this all gets resolved, if ever.
But wait, there's more. The probate court will require an appraisal, and the property will have to sell for 80% of appraised value. That not be a number that will work for you so once again, you will be wasting your time pursuing this.
If by some amazing stroke of luck it has been through probate and the property can be sold, you need the family to get together and pick one person to be in charge, and all the others give POA to the family leader. You have to deal with one person. You can never get an agreement with a committee. That includes the mentally incapacitated one. If no one is the POA for that person, you have the same issue as you do with the estate. The State will appoint someone to act on that person's best interest and good luck getting that person to do anything.
Have fun!
The issue here is standing.
Without legal standing, you cannot pass marketable title vested in record owner who is deceased.
Foreclosure can bypass this. So can certain quiet title actions. However, a formal probate is the method that heirs clear title after settling Decedent's estate.
An heir can assign their interest but not the interests of others.
An has beneficial interest in a Decedent's estate in the form of equity. However, there may be no equity after settlement of secured and unsecured creditor claims. In CA, the equity deal killer is Medi-Cal (DHCS). I've never seen a claim for less than $30,000, but that's in my state.
1/6 interest is a foot in the door, but not the whole enchilada.
The real estate agent, wholesaler or investor must recognize when opportunities don't fit their criteria and are better off referring to a local expert with experience so you both make money.
None of the other siblings have power of attorney?
I am pretty sure you cannot move forward without dealing with this issue.
In my experience from the family side a conservatorship is for the monetary aspects of an incapacitated adult and a guardianship is for making other decisions such as medical care. Check the courts if a conservator has been appointed. If this is a long time incapacity people may have forgotten, it does not need to be the same person that makes medical decisions and it could be someone other then a sibling. Here a conservator would be required for a total inheritance of > 5,000 but that differs by state, so if the sibling doesn't have one this could trigger the need for one depending on their share of the inheritance.
@Account Closed I like how you said that - auh Ha moment
You're not a social worker - so true. Thanks for that kick in the butt reality check.
I have all the other siblings willing to give POA to the one sister. My hurdle is that one incapacitated sibling.
I think I will just let the deal go and move on.
I'll consider this closed case unless we have a late comer that chimes in on this one.
----------------------CASE CLOSED -------------------
@Sabrina Kane Go talk to a title or escrow company. They will be able to guide you on your options and how they deal with this. If there is a way I would expect them to be able to help. You are guessing if you don't get a professionals opinion. You may be surprised at some way of potentially dealing with this. Alternatively if you don't want to hassle I have connections that would be happy to see this one through.
Hello Sharon this thread seems to be right up your alley. Would you be kind enough to post your opinion ?
Thanks , Mark G
@Mark- that's an old thread.