Can't find all heirs / need to sell property.

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guru10cea

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My jurisdiction is: Houston, Texas

Note: Property is in Houston Texas.

My grandmother (Jane) died intestate. She owned 75% of her home and her sister (Maria) owned 25% of the home. Maria is also deceased.

Jane has 5 descendants who are now heirs (entitled to 75% of the property) and there are 6 descendants of Maria (who are also heirs, but entitled to 25% of the property).

Jane's heirs are all cooperative and looking to sell the property. Most of Maria's heirs cannot be found; one or two of Maria's heirs were found and are likely to cooperate with the sale of the house.

A very willing / able buyer for the house / property has been identified.

How can this property be sold to the willing / able buyer (assuming all efforts have been exhausted to find the missing heirs on Maria's side of the family and assuming that taking the matter through a Partition Suit would not be favorable)?

For example:

Can Jane's heirs sell it with some sort of non-traditional deed to the buyer? What type of Deed?
What is the risks that the buyer is taking if they did this? i.e., what is likely to happen if one of the six heirs--who are only entitiled to 25%--were to show up after the sale?
How does title insurance play into this scenario? Is title insurance a factor if the buyer is looking to buy the property outright (without a mortgage / lender).
What are the chances that we will be able to sell this property to the buyer?

Any help you could provide would be greatly appreciated.

Best regards,
G
 
If the house was owned jointly when Maria died, her share would have passed to Jane by right of survivorship. Maria's heirs would have no claim to it, and there would be no need to locate them.

Assuming it was NOT owned jointly...

One of Maria's heirs should apply to be the personal representative of Maria's estate, and one of Jane's heirs should apply to be the personal representative of hers. Acting on behalf of the respective estates, they can sell the property to the buyer. It's a straight sale, the buyer takes full title. The personal reps can then distribute the proceeds to any beneficiaries that are located. If any can't be located, their shares can be held in trust for whatever period of time Texas law provides for, and then divided up.

Any beneficiary showing up later that tried to challenge the sale would have a difficult time. They'd need to show that the personal representatives were not acting in the best interests of the estate. Even if successful there is no guarantee they'd be able to overturn the sale - they might just be entitled to damages.
 
Wow. This site is great. Thank you so much for your response.

Regarding rights of survivorship, Jane and Maria's father (my great grandfather) willed the property to Jane and Maria (with the 75/25 split). We found this out as a result of a title search (in preparation of selling the property). Our lawyer stated that Maria's descendants were entitled to to 25% (based on the will and Texas law).

On Jane's side of the family we have an administrator for the estate. Your comments about having one of the heirs on Maria's side applying to be a personal representative, and then proceeding with a straight sale, is very attractive. I wonder how difficult it would be though for that application to go through (considering some of the heirs cannot be located, are uncooperative, etc.). Would a probate court require an extensive amount of work in order to grant one of Maria's heirs to be an administrator? We do have two affidavits of heirship, that have been signed off by two of Maria's heirs (if that makes any difference). Another concern I have is the feasibility of having one of Maria's heirs apply remotely (as the heir who is cooperative does not live in the Texas area). If those two items aren't hurdles, you may have solved my problem!!

Best regards,
G
 
Our lawyer stated that Maria's descendants were entitled to to 25% (based on the will and Texas law).

OK, that answers the question of whether Maria's heirs are an issue. They are.

I wonder how difficult it would be though for that application to go through (considering some of the heirs cannot be located, are uncooperative, etc.). Would a probate court require an extensive amount of work in order to grant one of Maria's heirs to be an administrator?

That depends on whether it's contested. It sounds like it might be. Unlocated heirs are not a problem; uncooperative heirs may apply to be the personal rep themselves. The fact that the cooperative heir is not local doesn't preclude them from acting as personal rep. But if it came down to a contest, a court might be inclined to appoint a competing local heir all other things being equal.

How many uncooperative heirs are there? If only a couple, they probably won't be able to hold up the sale one way or the other. The courts will give effect to the wishes of the majority - either by appointing a cooperative heir, or by ordering a sale. You mentioned in your first post that a partition suit would not be favourable. It's not clear at all why that would be the result. Texas law allows the court to order a sale where the majority owners request it, unless there are good reasons not to. (Partition of Property Act, s.6.)
 
Thanks again!!

Unlocated heirs are not a problem; uncooperative heirs may apply to be the personal rep themselves.

I should be more clear when I say "uncooperative". Their actions seem to convey disinterest more than a lack of cooperation / a risk of contesting. Their individual share is 1/6 of the overal 25% (and the property is estimated to be worth $75K) - so that equates to $3,125 for each heir on Maria's side. Perhaps this is not enough to get them moving (when you consider expenses to the estate may need to be deducted from this amount). There is a chance that they are just confused, skeptical, etc. and just don't want to have any part of it. There is also a chance that the situation, and their stake in the situation, wasn't effectively communicated. There doesn't seem to be any risk, so far, of any of Maria's heirs contesting / fighting for anything.

How many uncooperative heirs are there?

Here is a summary status for each heir:

Heir 1 = When contacted, didn't want to be involved in any way. Has moved and cannot be located.
Heir 2 = There was one or two brief phone calls, but his address could never be confirmed. Became unresponsive.
Heir 3 = Nobody has seen / heard from him for over 30 yrs. No contact info available.
Heir 4 = We have an address / phone number. Has been as cooperative as he could be.
Heir 5 = We have an address / phone number. Has been as cooperative as he could be.
Heir 6 = We have an address / phone number. Recently has been very cooperative and probably would be the ideal administrator.

You mentioned in your first post that a partition suit would not be favourable. It's not clear at all why that would be the result. Texas law allows the court to order a sale where the majority owners request it, unless there are good reasons not to. (Partition of Property Act, s.6.)

This may be my unfamiliarity with some of the terminology. My perception is that when a partition suit is initiated it could lead to a judgement by the court to sell the property (as you indicated above). The reason it is an unfavorable option is because we were told it could take up to a year and would be costly.


Our legal counsel indicated the following three ways that this could be potentially handled:

1. Jane's heirs can approach the buyer and suggest a non-traditional Real Estate transaction (e.g., "Deed without Warranty"). The risks the buyer would be taking on in this case is not completely clear.
2. Jane's heirs can "take it through the courts" via a "Partition Suit" - which would eventually lead to a court appointed realtor. The property would be sold by the courts / court appointed realtor. This is a costly option. Does "majority owners" mean the share (i.e., 75% vs 25%) or does it mean the majority of people (e.g., 5 vs 6 or 8 vs 3)?
3. We could not pay taxes owed and force it into a Tax Sale. After the tax sale we would approach the court for our share of any profit. This option seemed least favorable.

The 4th option that you are providing seems promising (as it seems we wouldn't need to go through a lenghthy / expensive court process and the buyer wouldn't be taking any risks because we would be transferring full ownership) - so let me make sure I understand it correctly.

- We have "Heir 6" apply to be an administrator for Maria's heirs/estate. The chances seem good as their shouldn't be anyone contesting this.
- Once Heir 6 is an administrator, he and the administrator for Jane's heirs/estate, can approach the buyer and convey full ownership of the property (the title would be considered clean after the transaction and the buyer would not be taking on any risk).
- The only involvement by the court would be the appointment of Heir 6 as the administrator for Maria's estate / heirs.

Is this correct?

Thanks again. You are helping enormously!
 
- We have "Heir 6" apply to be an administrator for Maria's heirs/estate. The chances seem good as their shouldn't be anyone contesting this.
- Once Heir 6 is an administrator, he and the administrator for Jane's heirs/estate, can approach the buyer and convey full ownership of the property (the title would be considered clean after the transaction and the buyer would not be taking on any risk).
- The only involvement by the court would be the appointment of Heir 6 as the administrator for Maria's estate / heirs.

Is this correct?

That's basically it. I'm not an expert on Texas law, but that's what I'd do where I am. There will be a few more details, and the Court might need to get involved to approve the sale by the administrators, but if it's uncontested, that shouldn't be a problem. If you want to make sure it goes through, get the consent of any other heirs that you can beforehand. Shouldn't be difficult: they basically get some cash for an asset that's useless to them as it currently stands.

I'd bring it up to your lawyer. They may know of some reason it won't work.

Our legal counsel indicated the following three ways that this could be potentially handled:

1. Jane's heirs can approach the buyer and suggest a non-traditional Real Estate transaction (e.g., "Deed without Warranty"). The risks the buyer would be taking on in this case is not completely clear.
2. Jane's heirs can "take it through the courts" via a "Partition Suit" - which would eventually lead to a court appointed realtor. The property would be sold by the courts / court appointed realtor. This is a costly option. Does "majority owners" mean the share (i.e., 75% vs 25%) or does it mean the majority of people (e.g., 5 vs 6 or 8 vs 3)?
3. We could not pay taxes owed and force it into a Tax Sale. After the tax sale we would approach the court for our share of any profit. This option seemed least favorable.

I concur with your lawyer. 3) is not a good option. The risks the buyer would assume in 1) are unclear to me either, and unless they're clear to the buyer, I would suspect they are not likely to purchase. :)

2) is not a bad option. I'm not sure why your lawyer thinks it would be costly: if none of the heirs are actively opposed, you can probably get this done by consent. But I would defer to your lawyer's advice.

In answer to your question, you need the wishes of the persons owning the majority of the property. The heirs of Jane own 75% - more than enough.
 
2) is not a bad option. I'm not sure why your lawyer thinks it would be costly: if none of the heirs are actively opposed, you can probably get this done by consent. But I would defer to your lawyer's advice.

Our lawyer stated the cost for his services and the costs associated with the courts make this a less favorable option. Some of the fees mentioned, that are associated with option 2 include: our lawyers fee (~$5,000 - $10,000), court appointed appraiser (~$750 - $1,000), court appointed realtor (6% of sale price), and misc. court fees e.g., ad litem, citation fee, filing fees, etc. (~$3,000).

He also mentioned the courts may make an attempt to find the heirs (this would be unfavorable from a timeline perspective). Your comment about 75% being more than enough conflicts with his logic. Since the 75% are my side of the family, we are all exactly on the same page, we have a court appointed administrator, etc., it seems they shouldn't make any attempt to find them.

The realtor for the buyer seems to have some ideas on how the transaction can go through in the current situation. He stated he will "do some due diligence to find the heirs" (but will not spend a lot of time on it), and may be able to "work around it". He's being a bit nebulous, so I'm not sure how seriously I should take him. As of right now it seems we should push the realtor for clarity and bounce your idea off our attorney.

Thanks for all of your help!! Jane's 5 heirs really appreciate it!
 
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I called the Probate Court to see what would be involved in getting one of Maria's heirs to become an administrator. They informed me that if it has been more than 4 years since Maria passed away, it will be difficult / impossible to appoint an administrator for Maria's estate. She passed away more than 4 years ago...

It looks like this leaves me back to square one...

Any other thougths?
 
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Your reference to Maria's descendants as heirs made me think the estate had not been settled. I see from the other thread that it has been settled and that all 5 are on title. That being the case, my suggestion of getting one to act as representative will not work. There is no estate left to represent. I concur with nextwife and texaspooh in that thread.
 
I was under the impression the estate had not gone through probate and the property was still titled in the name of the deceased Maria. I see that is not the case. My suggestion of having one of Maria's descendants act as personal representative will not work, since there is no estate left to represent. That being so, I concur with nextwife and texaspooh: file suit for partition and sale. (The fees still sound exorbitant to me - it could be done in my jurisdiction for far less.)
 
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