Deed Mixup Alters Joint Ownership for Two Brothers

Case Study from Bill Schaaf, Walnut Creek

Bill

One of our clients, an unmarried man with two grown children wanted to create a Revocable Living Trust. He thought he owned two properties with his brother, and he wanted to make sure his children inherited his half of these properties when he died.

We have access to current deeds

We explained that our comprehensive Living Trust package also comes with a Will, Financial Power of Attorney and an Advance Healthcare Directive, and he was delighted to be taking care of all of this at once—something that he’d been putting off for a long time. A Trust requires that the titles of deeds be transferred into it. In order to do this, we pulled the deeds to the two properties in question. We almost always pull the current deeds for our clients. Responsible practice requires that we work off of the current deed to the property with which we are working. But who knows where their deed is? Hint: It’s not in that big package of papers you took away from the title company when you bought your house. No one ever has his/her deed. But in order to be of assistance, and to save our clients a trip to the County Recorder, we subscribe to a title company service that allows us to pull up the current deed–a tremendous help to our clients.

No joint ownership…

So what did we discover? Each brother was now the sole owner of one property—there was no joint ownership, as they had believed. Through the years they’d refinanced the properties to capitalize on low interest rates and the titles had become mixed up. This was not what they wanted, so they were delighted to be able to correct this. The California Document Preparers solution: back to 50/50 ownership.

We created and transferred four deeds into the Trust, clarifying that each home was owned 50% in each brother’s Trust. As a cautionary procedure, we also suggested both brothers take the new deeds to the assessor’s office and explain that originally both homes were owned 50/50 and now they are back to their original 50/50 ownership. We wanted them to make sure the assessor doesn’t reassess the property based on one brother’s transferring property to the other–reassessment could cost the brother $5,000 a year in additional property taxes!

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