Ask the Titleman™ - Mechanic’s Lien; Beneficiary Deed; Short Probate
by John T. Lotardo aka TITLEMAN™-Sr VP/General Counsel, Stewart Title & Trust of Phoenix
Q. I received in the mail last week an Arizona Preliminary Twenty Day Lien Notice from an Electrical Supply Company, who is a subcontractor for a builder, who is doing work on this development of mine. Is this typical and is there anything that I need to do in response to the notice? I am not familiar with the Arizona Mechanic’s Lien laws, but I am assuming that this is standard - please advise. Thanks for your help.
A. Fear not. This is rather typical since sending the 20-day notice is generally required for a contractor/materialman to later enforce a lien. If, after your careful review of the notice, there is something that is not accurate- a different amount not in the contract, different property, etc. then you should dispute the accuracy at this time. I hope this helps explain it better.
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Q. We have a client with a question. She wants to do a Beneficiary Deed to her daughter (owner is unmarried and owns the property alone). The daughter is married. The owner does not want the daughter and son-in-law to know about the deed so she doesn’t want to have the son-in-law sign a Disclaimer — but she also doesn’t want the son-in-law to inherit. With a Beneficiary Deed, in this state, is a Disclaimer still necessary?
A. A transfer of real property by way of devise through a Beneficiary Deed does not require a Disclaimer Deed. They can delineate in the vesting on the Beneficiary Deed how the Grantee is taking title - In this case, a married woman as her sole and separate property. Please let your client know that they should consult with their Accountant and/or a licensed Attorney to ensure this is the best course of action for her since there may be other matters unknown to you at this time that requires more assistance. Although it is true that the daughter does need to know about the deed, I have handled at least one case wherein the Beneficiary didn’t know about it and they started probate for the deceased mother. Only to find out later that there was a beneficiary deed recorded. Knowing up front would have saved them a lot of time and money in the matter. With that said, it is up to the client how they want to handle the matter.
Q. I received a phone call from a potential client whose mother passed away in the fall. She has two siblings and all three are named in the will to divide the property equally. This person has also been appointed by her mother to be the executrix of her estate. An attorney informed her that as long as the equity is $50,000 or less, they can avoid probate and deal with the property. It doesn’t make sense to me. Am I missing something? The sales price, if they decide to sell, would be approximately $250,000.00. Could this be a case for some sort of short form probate? Her mother purchased the property as an unmarried woman and did not remarry.
A. The short form probate that you refer to is the use of the statutory prescribed - “affidavit of succession of title to real property”. This is used when the interest in real estate owned in Arizona by the mother is less than $75,000 (this amount increased sometime ago). The sales price is not the focus but the equity she had in the property. Let’s assume the mother did not own or hold any other interest in other property in Arizona. The affidavit together with a certified copy of the death certificate and the original will would be filed with the Probate Court and thereafter a certified copy of the court-filed Affidavit would be recorded in the County where the property is located. The important issue here is time. You cannot use this form of affidavit within 6 months of the death of the mother. After that time, they can consider the use of the Affidavit.
The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Copyright John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.