Failure to Deliver: The Problem with Pocket Deeds and a Review of Alternatives

A “pocket deed” is a deed that is not actually given to the person it’s meant for until the person who owns the property dies. The problem with this is that if the owner dies before giving the deed, the transfer of property is not valid. Both the delivery of the deed and the acceptance by the new owner are needed to transfer the property. This means that the person who wants to give the property to someone else needs to actually hand over the deed before they die. Louise Jeffords and the children of her deceased son, Roy Harold Jeffords, argued about whether a deed from Louise’s husband, S.M. Jeffords, was properly given to Roy Harold. Louise said she and S.M. signed the deed, but she kept it until S.M. died. Then she gave it to Roy Harold’s wife, Lillie Bell, to keep safe without recording it. But the deed was recorded later without Louise’s permission. The notary who prepared the deed messed up, which caused a lot of problems. The court said there was a problem with the evidence and reversed the previous decision. The notary’s mistakes show how important it is to hire a good lawyer for real estate and estate planning. If the Jeffords had done that and put the deed in escrow, they might have avoided these problems. If someone wants to give property to someone else in a deed, they have to make sure that they completely give up control of the deed. They can’t have any power to take the property back after they give the deed. If they give the deed to a third party, like a lawyer, with conditions or for the third party to give it to the person later, then they can still take the property back. It’s important for the person giving the property to make sure they give up all power to take it back, or else it might cause problems later on. In real estate, if someone wants to give their property to someone else when they die, they can do it in different ways: either by giving up control of the property while they’re still alive, or by keeping control until they die. One way to do this is to create a “life estate,” where the person giving the property continues to live there until they die, and then the property goes to the person they wanted to give it to. The other way is to use an “enhanced life estate deed,” which allows the person giving the property to keep some control over it until they die, and then it goes to the other person without having to go through a legal process called probate. An enhanced life estate deed gives someone the right to live in a house for their whole life and allows them to do things like sell the house. However, there are some disadvantages, like the fact that any debts the person has will be attached to the house. Also, when the person dies, their interest in the house may be taxed, and if there are multiple people who will inherit the house, they all have to agree on what to do with it. So, it’s important to think carefully before using an enhanced life estate deed. Land trusts offer the same benefits as life estate and enhanced life estate deeds, with the added benefit of privacy. They can help avoid probate and make it easy to pass on ownership of land after the owner passes away. It’s important to note that there are some restrictions on how the land can be sold or transferred under Florida law. Overall, land trusts can be a good option for anyone looking to keep their property private and avoid the hassle of probate. A land trust is a private way to transfer ownership of property. When the person who originally owns the property dies, the next person in line to receive it automatically becomes the new owner, without going to court. This keeps the transfer private, since the new owner’s name isn’t public. When property is transferred to a land trust, there might be taxes to pay. If the new owner pays money for the property, they have to pay taxes on that amount. If they don’t pay money but the property has a mortgage, they pay taxes based on their share of the mortgage. If only the trustee changes, there are no taxes to pay. Before transferring property, it’s important to make sure everything is legal and that the new owner can get title insurance. If there are any conditions, they need to be written down and verified by an escrow agent. If everything is okay, the new deed should be recorded right away. If there are problems, the old owner should be told and the deed should be given back. This is a collection of legal cases involving real estate deeds in Florida. It discusses the rules and standards for different types of deeds, such as enhanced life estate deeds. The cases also cover issues related to delivery of deeds and the rights of different parties involved. Overall, it provides information on the legal aspects of real estate transactions in Florida. Kara L. Stachel is a lawyer who specializes in real estate and probate law. She thanks Robert Beharriell and Tara Wood for their helpful suggestions and comments. This information is from the Real Property, Probate and Trust Law Section. Their goal is to promote duty and service to the public and improve the justice system.

Source: https://www.floridabar.org/the-florida-bar-journal/failure-to-deliver-the-problem-with-pocket-deeds-and-a-review-of-alternatives/