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Promissory Notes that are Due on Demand
Promissory Notes that are Due on Demand
William Shakespeare gave us the famous line from Hamlet “Neither a Lender Nor Borrower Be”. If Polonius would have known more about Promissory Notes, he may have thought differently. Promissory notes create a legal obligation when there is a loan of money or someone promises to pay for a product or service at a later time or in several payments. What is lesser known are Promissory Notes that are due on demand, more commonly known as a Due on Demand Promissory Note. Simply put, it gives the holder (the owner) of the note the right to demand payment at any time, or after a specific time. The Arizona Legal Form Library would like to touch on why you might use this type of Promissory Note.
When to Use a Due on Demand Promissory Note
First and foremost, a Promissory Note is used when loaning or borrowing money. The loan can be between family or friends or it may be a loan between an individual and a bank, a store or other legal entity. A Due on Demand Promissory Note is generally made between two individuals; it gives the lender and the borrower a time frame and/or expectation of when the loan will be paid back in full. For the lender, it can be a good way to acquire more control over a loan made to family or friends. The Due on Demand Promissory Note differs from a standard Promissory Note because it is payable “on demand” and not under a payment plan. At anytime after the “due on demand date” the lender has the right to demand repayment from the borrower. The demand amount includes the accrued interest as stated in the terms of the Promissory Note.
Arizona Revised Statutes Section 44-1201(A) provides that “Interest on any loan, indebtedness or other obligation shall be at the rate of ten per cent per annum, unless a different rate is contracted for in writing, in which event any rate of interest may be agreed to. . . . ” In the past Arizona did have statutes governing usury (an unconscionable amount of interest) but in 1980 the Arizona legislature amended the general usury statute to allow any interest rate agreed to in writing; thus there was thus no longer any limit on the interest that could be charged. There are administrative regulations established by the Arizona Department of Financial Institutions which govern certain practices including lending and interest in professions such as banking and insurance but agreements between private individuals do not fall within this type of administrative oversight.
The Due on Demand Promissory Note is not a customary note but it works well under circumstances where no payment is expected until a certain date and both parties agree that no payment will be made during the period of time between the date the loan is made and the date of repayment.
When Do I Need an Installment Note
There are times, occasionally, when someone needs to borrow money. We’ve discussed Promissory Notes before. Promissory Notes legalize and bind two parties when there is a loan involved. Generally speaking, notes are easy to understand documents that explain the facts about the loan itself. With that being said, an important part of a loan process is knowing the answer to this question: “When Do I Need an Installment Note”.
When Do I Need an Installment Note
To keep it simple, by definition, an installment note is a Promissory Note. An installment note calls for payment of both principal and interest in specified amounts, or specified minimum amounts, at specific time intervals. This periodic reduction of principal amortizes the loan. Interest due is kept current under the payment plan and the principal is reduced by some portion after each payment. Over the term of the payment schedule the interest paid will become less while the principal paid back becomes more.
Standard Installment
Both the lender and the borrower agree upon the payment of the Promissory Note, the terms of the payments and the interest rate to be charged. All terms and obligations are clearly spelled out. The payment structure of a traditional note is consistent over a specified period of time. The beauty of the note is that consistency — for both the borrower and the lender. If for whatever reason, the borrower defaults on the loan, the most common terms found in a note will provide that the lender may elect to accelerate the entire amount due and demand payment in full at that time or the lender can elect to have the accrued interest added to the total principal amount owed on the note at the time of the default.
Unfortunately, loans from banks, mortgage companies and auto lenders over the years have made loans seem like a complicated process that the average layman can’t decipher. These types of lenders, however, hold security for the loan being made so if there is a default in payment, they can recover the loan amount by collecting or foreclosing on the security (such as an auto or real property). These types of loans entail much more paperwork and terms.
With an unsecured Installment Note, the loan is far less complicated and simply spelled out. If you have a loan situation where you would prefer to keep things simple and you do not require security for a loan, then the Installment Note can be a great choice. In any circumstance where a loan is made between family or friends, documenting that loan in a written form creates an understanding that can eliminate future problems. As the lender, you can construct an Installment Note in the Legal Form Library, naming the parties, where payment will be made, the interest to be charged, the period of time the loan will run, monthly date when payment will be due, and the payment amount. Visit our interactive downloadable forms for more information.
VOTE Against Big Money
Have you found yourself telling someone – or agreeing with someone – that big money is ruining our democracy? It seems a common assertion (at least among those of us with modest pocketbooks) but our representatives have yet to change the status quo in Washington. These representatives were elected to work for the American people; and they are quite capable of writing laws that can reign in big money, that curtail lobbying, and that create transparency. Efforts to make these changes by some candidates who previously campaigned on promises to do so have tended to lose traction once those representatives were engulfed by the system where big money is in place. Those candidates need more support, and we can continue to VOTE into office people who will work together for these changes.
Once again, it is election time – and an opportunity to VOTE – to use our voices to take representatives out of office who are maintaining a partisan regime that makes no effort to collaborate with others and to find workable solutions for the country as a whole, including removing big money from politics.
Big money has been in politics for years and becomes more entrenched as each year passes. Less than a year after the resignation of Richard Nixon, at a bill signing ceremony in 1974 which placed spending limits on election campaigns, President Gerald Ford said that “The unpleasant truth is that big money influence has come to play an unseeming role in our electoral process. This bill will help to right that wrong.” It was only two years after that bill was put in place that the wind was taken out of it when the Supreme Court ruled in Buckley v. Valeo that mandating spending limits in elections represented an unconstitutional limit on free speech. Since then we have had Citizens United vs. Federal Election and McCutcheon vs. Federal Election Commission which have completely undermined attempts on campaign finance reform. Citizens United boldly held that political spending is a form of protected speech under the First Amendment, and the government may not keep corporations or unions from spending money to support or denounce individual candidates in elections. This gave big business through their corporations and unions the same First Amendment protection of an individual citizen, establishing a new precedent in finding that an entity, a structured business organization, could donate unlimited amounts to campaigns which it collected from persons whose identities could remain secret and undisclosed. We now see advertisements from all manner of organizations whose names give us no sense of alarm, and who present slanted viewpoints that may appear reasonable and legitimate. Of course, we are used to the fierce rhetoric of campaigns, the disrespect and no holds-barred approach that have become common tactics.
As depressing as the campaign season can be, it is very encouraging to find that research does not support the idea that negative campaigning is effective in winning votes. In fact, research is showing that a negative ad is one of the strongest prompts to have someone change a channel. There is not even reliable evidence that negative campaigning depresses voter turnout; however, it does seem to lower feelings of political effectiveness and trust in government. If this creates indifference, it may well influence voter turnout although it is not tied yet to research statistics. Fact-checks, on the other hand, are influencing people’s assessments of the accuracy, usefulness, and tone of negative political ads. Studies are showing that fact-checks tend to sway citizens’ likelihood of accepting the claims made in the advertisements and fact-checks challenging the truthfulness of the claims of the negative commercial are more powerful than positive fact-checks. Despite research findings, the use of negative ads has continued to increase. Why those producing these campaign ads neglect to acknowledge the intelligence of the people who will be viewing the ads is a curious factor.
On more than one occasion I have heard America described as a capitalistic democracy because it is money that controls the system and not the people. This does not have to be the case. 2016 demographics show that there was a 230,585,915 voter eligible population (this excludes those in prison and on parole who are not eligible to vote). Of the almost 230.6 million people who could vote, only 138.8 million people cast ballots – about 60% of voters. This does not have to be our standard. 100% of voters can make huge changes in who is put into office and who is taken out of office. If we want representatives who collaborate, who work together for the benefit of all citizens and not for big money interests, we can work together to make ourselves heard in an election. Every voice matters but it is only counted if you VOTE. Cast a ballot. 100% of voter voices would be a huge wake-up call to those in office. The more frequently representatives are taken out of office for failure to act for the benefit of all citizens, the more we will see new people step up to fill those vacancies; the kind of people that we are calling out for. Every two years the entire structure in Washington can be overturned by the people’s VOTE.
Protecting A Child’s Inheritance
Protecting A Child’s Inheritance
Protecting your loved ones for the possibility of your eventual passing is a common practice for most families. This is especially important if you have young children. Many times this process is kept simple by purchasing life insurance. Life insurance can insure that your children are financially taken care of in your absence, but how does that work if your children are minors at the time of your passing? Protecting a child’s inheritance is paramount.
Custodians of a Child’s Inheritance
The important part of all of what we are discussing today is that distributions of cash or other valuable property cannot be made directly to minor children. As long as your children are minors they cannot receive lump sums of cash or property upon your passing. A conservator or custodian or trustee will always need to be appointed. You can nominate someone to act as a conservator or custodian or trustee in your Will or a Trust. If no such document exists, or if your Will or Trust does not name a conservator or custodian or trustee for minor children, then the appointment must be made by a Court.
Leaving a Child Property
If you name a custodian in your Will, in the state of Arizona, it is a simple process to transfer property or cash to that custodian under the Uniform Transfer to Minors Act (UTMA); the custodian will hold the cash or property until a minor reaches 21. In cases where a custodian is not designated in a Will or Trust, of if there is no Will or Trust, then a minor child who will inherit over $10,000 in cash or property assets must have a conservator appointed who will manage the cash or property. Your Will can nominate a conservator to manage property for a minor child, if you prefer that to a custodian. A conservator handles cash and property only until a minor becomes 18; then the cash and property are turned over to the young adult. A conservator is subject to court oversight and must report to the court every year regarding the status of the estate including all income received and expenditures made. A Will can also establish a trust for a minor child and appoint a Trustee to handle cash and property which will keep the management of the assets out of Court. Similarly, a Trust can nominate a conservator for minor children or it can provide for a continuing trust for minor children; this will also keep the management of the assets out of Court. A Trust can set up terms to see that cash and property is managed until a child has matured beyond 18 to an age you feel more appropriate (for example until a child is 21 or 25 or even 30); the Trust is not subject to court oversight.
Inheritance to a minor, however, will require that one of these fiduciaries (custodian, conservator or trustee) be in place before distribution can begin. It is important that your Will or Trust direct these actions and appoints someone who you want to be in such a trusted position. Your Will or Trust should be direct and concise concerning all points.
Basic Will forms which provide for the appointment of custodians for minor children can be found at the AZ Legal Form Library, an interactive library provided by Cautela Corporation where you can prepare your own Will on-line; for more complex estate planning, please feel free to contact Cautela Corporation for a consultation.
Inheriting of Property After A Death
Inheriting of Property After A Death
When dealing with a death of a loved one or friend, it’s inherently a difficult time in your life. One of the most important items to be prepared for is the possibility of the inheriting of property after a death. Most of us believe, and for good reason, that a Will or a probate will handle this for us, and sometimes it does. Usually, however, there will be steps and procedures that must be followed in order to transfer joint tenancy property into your name alone (or with other surviving tenants/owners). Both personal property or real property can have a joint tenant or a named beneficiary.
Inheriting Property in Arizona
Any joint tenancy property held together with a spouse or other individual is passed to the surviving spouse or other joint owner. There is no need for a probate to transfer the property, this is called a joint tenancy “with rights of survivorship”. This form of transfer can make things simple and uncomplicated. Many individuals own property in this form. Interestingly enough though, joint tenancy controls over a Will or Trust. Therefore, the joint holder owns all right to the property even if the Will or Trust says something different.
For most assets held in joint tenancy, the institution or agency where the joint tenancy property is held or registered must be notified of the change in ownership; such as bank accounts, stock accounts, automobile or boat titles, real property. To claim property, the survivor must submit or record documents with the appropriate institution or government agency to make it official. The institution which holds personal property held in the names of joint owners will provide forms and instructions to you so that you can place the property into your name. You will need to contact that institution after a death has occurred; it will require submission of a certified death certificate in addition to the forms which it provides to you. Real property interests held in joint tenancy is different and requires that an Affidavit be recorded to attest that an owner has passed and show who the surviving tenant or tenants are. The affidavit must contain certain criteria required by statute, including:
- A legal description of the property
- A statement that the property was held in joint tenancy
- The legal name, and date of death of deceased owner
- The name of the surviving owner(s)
- A certified copy of the death certificate
To find the proper documentation and process information for the state of Arizona go to our legal form library.
Writing A Will
Writing a Will in Arizona
Dying without a will, well, to be truthful, can be ugly. Probate court, and feuding family members is not what most want for their families after their passing. Whether your spouse has passed on, or you just never married, or you have a partner, it really doesn’t matter – it’s always wise to write a will to make sure your belongings and assets are passed on appropriately.
If you don’t appoint someone to manage your estate, it is possible that relative may step up to manage things – or perhaps a friend – or even a creditor in some cases. If no one steps up, any financial accounts will be turned over to the State of Arizona as unclaimed property after a certain number of years has past. If and when an heir discovers property being held by the State, that heir will have to go through certain procedures to claim the property. Other property like personal or real property, may just languish or be taken advantage of by others; real property may end up on State lists for property tax sales when taxes have remained delinquent over a number of years.
If no one knows who your relatives are, it can be an added expense to your estate to try and locate those relatives, if there is any one who steps up to try and manage the estate. The Court will not try to find your heirs; some one else must request authority from the Court to take possession of the estate and to conduct an investigation to find them.
Believe it or not, more than 50 percent of people still don’t have a will. It seems obvious that most people just don’t think about it – or don’t want to think about it. They may still be young or perhaps they have never suffered an illness which often brings up our thoughts about immortality and our estate.
Certain people never reach one of those obvious points in their lives to write one. If you are unmarried in middle age, do not have children and have never had a devastating disease or brush with death, making plans for what happens to your assets if you’re not around may not feel pressing.
One day though, you may hit a certain age when you just say to yourself “Who’s going to take all this when I’m gone?” At some point the thought comes to mind.
What Do You Do?
For most middle Americans, who don’t want to set up a trust plan, and just need to pass things on to a family member or loved one, it’s a simple process, but it should be well thought out. Will this person be a good steward of what I leave them, will they sell it or worse, throw it all away? All aspects should be considered.
For a simple will in Arizona, click on our form finder to make sure you’re searching for the correct will to write for your circumstances.
Arizona Intestate Succession
Let us start out by saying, we in no way want you or your loved ones to go through a lengthy probate process in the Court system after the passing of a loved one. This article will tell you how estate planning can help avoid that Arizona Intestate Succession process. There is often much confusion among family when a loved one dies without a Will, and there is a lot of misinformation about this circumstance that creates fear at times when the family should be able to turn attention to a grieving process – not a legal process.
When there is no Will, there may indeed be problems because it is the law that determines how the estate will pass and to whom – this is called intestate succession. This may or may not be what the deceased would have wanted.
Intestate succession follows a lineal descent pattern – this pattern is often the same way that many people would customarily pass their estate, such as one spouse to the other spouse and then to their children, if both spouses are deceased. Intestate succession law does not provide for who will administer an estate although there are other Arizona statutes which determine who has priority for appointment as the personal representative (administrator).
Not all estates must pass through a probate process in the Court. Whether or not an estate is probated in Court depends on the types of assets, the value of those assets and the title on the assets. A Will is important to make sure that your final wishes are met; that those you wish to receive gifts do receive those gifts; and that the person you wish to manage your estate is recognized with that authority. If for whatever reason a Will was never composed, here is how the process generally works in the state of Arizona.
The first part of Arizona Intestate Succession Law is very simple, if you pass without a Will, your closest relatives are benefactors. Here is how “closest” relatives break down in the state of Arizona:
If you die with a spouse, or a spouse with children common to that marriage, all assets go the spouse. If you have no spouse but do have surviving children, your children inherit. If you have a surviving spouse and have children who are from another marriage, the surviving spouse and the children from the prior marriage are going to inherit portions of the estate in shares that are defined by statute.
Grandchildren also can inherit the share of a deceased parent. If you do not have a surviving spouse, children or grandchildren, but have living parents, your parents will inherit all assets. Moving forward beyond parents the benefactor list gets very complicated. A Chart on Intestate Succession can be found at azlegalformlibrary.com under the information section on heirs.
As you can see, the value of a Will grows intrinsically as your family grows. The importance of a Will also comes into play when there are assets that are not community because some family members may feel they can legally lay claim to those assets. This can truly be jarring for all sides of your family. Arizona is a community property state. Community property and separate property are treated differently; a Will can help avoid issues with these different property classifications.
The most practical way to insure your death does not create additional burdens for your family is to complete a Will now. With a Will you can make sure your loved ones spend no more time than necessary working on your estate and allow their lives to move forward in a comfortable manner.
DIY Legal
Many of life’s important decisions, whether for personal or business use, are done today DIY legal style (Do It Yourself). DIY Legal documents created between individuals to facilitate a transaction do not always need an attorney or to be prepared by an attorney. What they do need is to be legal, easy to understand, and have the ability to hold up in a court of law.
DIY Legal
A very important detail in most legal documents between two parties is to have the official name, address and contact information of both parties; the document must meet basic legal criteria (and sometimes very specific criteria which is stated in a statute or regulation); the DIY person may or may not be familiar with that criteria. Often the marital status of a party must be identified; a simple yet basic criteria often overlooked by the DIY person; and one that can create much problem later when it is omitted. Be cautious and use good resources! What you may think is “reasonable” may not always be “legal”.
The National Academy of Elder Law Attorneys (NAELA) recommends that every individual have the following personal legal documents:
- Power of Attorney- A POA (for yourself) grants authority to another person to act for you in legal matters, if you become incapacitated; it must be executed prior to incapacity. A properly drafted power of attorney may preclude the need for court action, if you do become incapacitated, saving substantial legal expense and invasion of privacy by court intervention.
- Health Care Proxy- Also known as a “health care surrogate” or “durable power of attorney,” allows you to appoint an agent to make health care decisions if you are not able to make them yourself. Generally, a health care proxy is a next of kin, a spouse or child, but anyone can be appointed. It is best to choose someone close and readily available to make decisions. However, it is possible to appoint a person who lives at a distance; with telephone and technologies, the communications between physicians, hospitals and agents can be managed.
- Living Will- Also known as a “Do Not Resuscitate Directive” helps clarify your health care desires to family members and medical professionals. A free Living Will form, valid in the state of Arizona, can be found here. https://azlegalformlibrary.com/Library/living-will/ Laws about these critical documents vary from state to state.
- Last Will and Testament- This statement formally declares what you would like done with your possessions upon your death and must be executed in conformity with state law.
Other legal documents needed in the DIY community are: deeds, promissory notes, small estate affidavits or even revocation documents.
These and many other documents for personal use and for business transactions, specific to the state of Arizona, can be found on our site https://azlegalformlibrary.com/Library/. If you’re not sure of which document is best for your situation, use our incredibly intuitive form finder https://azlegalformlibrary.com/Library/findform/findform.php to narrow down your search.
Visit us @ https://azlegalformlibrary.com/Library/ today!
Wills
Fifty-six percent of Americans say they do not have a will. A 2016 Gallup survey said a majority of Americans haven’t designated how their estate should be divided after their death. For people who have children, state laws generally designate belongings to go to a spouse or kids if there’s no will. If you pass intestate (with no will), Arizona has a number of specific guidelines dictating how an estate settles in the event someone dies intestate. That it is why it is so important in writing a will with children. Their protection after your passing is paramount, the succession can be tricky if not handled properly.
Writing A Will With Children
Writing out your last wishes and the distribution of your assets to family and loved ones in your will helps avoid confusion after your death. The will must be clear to avoid misinterpretation of your directions by the Arizona probate court. Arizona law contains standards that must be met for your will to be admitted to probate, the legal proceedings used to give authority to the executor you named in your will. The executor is the person who will carry out your will’s directions, transfer assets and items to your heirs and settle your financial affairs.
A Will allows you to distribute your property to those you want to have it. It allows you to appoint a person to see that your wishes are carried out, appoint a conservator and guardian for your surviving children if necessary, and provide cash to your family for expenses.
After you have prepared your Will, you may want to make photocopies of it for your beneficiaries or personal representative. On each page of a copy, you should print the word “COPY” in bold letters. NOTE: Only the original of your Will is valid. Copies are used only for reference during your lifetime.
Our site, contains all types of DIY Wills you may need in the state of Arizona.
Arizona Promissory Notes
Arizona Promissory Notes
Ever borrow money or loan money to someone else? Then you’ve probably signed a promissory note or received one for the transaction. Most questions we receive are from individuals who have never prepared a promissory note, and if they have, it may not have been in the state of Arizona.
Legally Binding Obligation
The purpose of the Arizona promissory note is to create a legally binding obligation between two parties when money is loaned from one to the other. We find that most individuals are creating a purchase and/or loan agreement with someone they know and trust and are willing to accept payments over time. A promissory note can be used for many different transactions, such as: mortgages, car loans, student loans, a business loan and, of course, personal loans.
The promissory note is created to protect both parties, but especially the party which is making the loan. In case of default, or nonpayment, the party making the loan has proof in a signed document, of the initial transaction and terms agreed upon.
What Should a Promissory Note Include
Your note can be as detailed as you would like, or as simple as you would like. We obviously suggest a detailed and well outlined promissory note, which you can find in our Library. You can prepare a promissory note yourself, make sure to include all pertinent information about both parties and the terms of the loan itself. Beware of free quick forms that have no knowledge of your state laws; that is where most can get trapped. Trying to save a dollar today, may cost much more in the long run.
Arizona Promissory Notes
Like almost all promissory notes written nationwide, an Arizona promissory note must have basic information such as party names, amount and interest charged. It should include specific legal terms and remedies. We recommend using our Arizona Legal Form Library to find the right Arizona promissory note for your situation.
Arizona Quitclaim Deed
We are asked on a regular basis “Why would I need an Arizona Quitclaim Deed?”. The bottom line is, it’s fortunate we have them. It’s not uncommon for people today to transfer property within one’s family or to even change their last name, especially after a legal marriage. With an Arizona Quitclaim Deed it makes the process of transferring property pretty seamless, and here’s why:
By definition, an Arizona Quitclaim Deed is used in the transferring of rights in real property from one entity to another within the state of Arizona; in most instances these are not sales. Those entities can be individuals, partnerships, and even corporations. Typically, there is no money involved in the transaction nor any issuance of title insurance.
When Would I Use a Quitclaim Deed
A common time an Arizona Quitclaim Deed is used is in matters of divorce. Generally, when a married couple divorce, the assets of the couple that were previously shared are now split between the parties. Though the court may sign off on the legality of the divorce decree, the court does not split the assets for them, that is the responsibility of the divorced parties themselves. A divorced party may then (in matters of real estate) use an Arizona Quitclaim Deed to sign over the other party without a warranty title.
An Arizona Quitclaim deed does NOT release one party from any mortgage, loan or lien against it. It’s important to know, that those obligations can still be in full force after a quitclaim deed is signed. To legally accomplish the title transfer, all quitclaims, need to be signed by the owner(s), in front of a notary public, and submitted to the appropriate Arizona County Recorder’s Office for recording. Quitclaims which create ownership in joint tenancy with right of survivorship or community property with right of survivorship must also be signed by the person(s) receiving the title, in front of a notary public.
For a full list of the Legal Forms for the state of Arizona, make sure to visit https://azlegalformlibrary.com.
What Is A Small Estate Affidavit
October 31, 2018 by Marley Beard • Estate Planning, Uncategorized • Tags: small estate affidavit •
What Is A Small Estate
Arizona law defines small estates are as those in which the decedent owned less than $100,000 in real estate equity or less than $75,000 worth of personal property. These values are only counted for those assets subject to probate which means they are assets which are titled only in the name of the decedent and do not have beneficiary designations. For example a decedent may have an investment account worth $200,000 which has beneficiaries listed to receive the account after his or her death and that decedent may have a bank account with $50,000 that is in his or her name alone. The $200,000 investment account is not part of an estate subject to probate; only the $50,000 bank account would be subject to probate. That bank account can be collected with a small estate affidavit and without court involvement. For any estate with personal property subject to probate and valued above the $75,000 amount, probate will be required.
The small estate affidavit process may only be used in cases where probate is not required. An exception is when there has been a probate administration in the past and new property is discovered; if the probate administration has been closed for more than one year, the small estate affidavit can be used to collect the property.
It is important that Arizona residents and their family understand what is involved with a small estate and if they will need a small estate affidavit. Below are some commonly asked questions about a small estate affidavit for real property and known as an Affidavit of Succession to Real Property.
How Is Real Estate Transferred
For any estate where the decedent owned an interest in real property with an equity value over $100,000, probate will be required. A.R.S. Section 14-3971 provides that the value of the decedent’s interest in that real property shall be determined from the full cash value of the property as shown on the assessment rolls for the year in which the decedent died, except that in the case of a debt secured by a lien on real property then the equity value of the property is determined by deducting the unpaid principal balance due on the debt (the mortgage amount) as of the date of death from the total value of the real property; this provides the equity value.
In most cases, but not all, the tax assessment (full cash value) of the property is often less than the current fair market value of the real estate.
An Affidavit of Succession to Real Property cannot be executed until six months after the owner has died. This can be an important consideration in deciding whether the affidavit procedure is appropriate. There are circumstances where the property must be sold before a six month period has elapsed. In these cases, a probate is required to appoint a personal representative (executor) who is given authority to manage the estate and sell the property. An Affidavit of Succession to Real Property can be used to transfer the property to beneficiaries named under a Will or to intestate heirs.
An Affidavit of Succession to Real Property must also be filed in Court and then a certified copy of the Affidavit is recorded in the County where the property is located; the recorded Affidavit is like a deed and has the effect of conveying title to the successors. Although the Affidavit is filed in Court, it does not commence a probate administration; it simply complies with a statutory requirement.
Paying Off The Mortgage
If there is still a mortgage on real property that is being passed to a successor(s) under an Affidavit procedure, that property is conveyed subject to the mortgage. The holder of that mortgage still has right to collect the mortgage. This can create problems depending on the language in the lien document (called a Deed of Trust in most cases). A lender will not simply transfer title to a mortgage to another person; often a successor will need to qualify for the existing amount of the debt or refinance the debt. You may want to research the consequences of changing the title with the lender or seek advice from a legal professional.
Please check our online library for more information on the Small Estate Affidavit and for available forms.