Probate Case Is the First Step In Resolving Ownership Obligations

Q: Several years ago, my brother and I bought an investment property. Because we each were married and had children, we took title as tenants in common.

Recently, my brother died. His wife predeceased him, and his children are not willing to pay their share of the outstanding mortgage, taxes and insurance. Are they legally obligated to do so?

A: First, who now owns your brother's half-interest in the property? Because you held the house as tenants in common, that means each of you had a divisible interest in the property. Did your brother have a will? If so, the terms of that document will control who gets his half of the property. If there was no will, the laws of intestacy in the state where your brother died will apply. For example, in the District, if there is a wife, she will inherit the property. If the wife is deceased, the children will share the property equally. Laws may differ from state to state.

However, when a person dies -- with or without a will -- a probate estate must be opened in the local court. In most states, the property of the deceased remains in limbo until the court appoints a personal representative, also known as an executor. Once the appointment is made, title to the property will go into the name of the personal representative.

Has anyone opened a probate case for your brother? If not, you should consider doing so immediately. If your brother's children are not willing to do that, you can petition the court to appoint you the personal representative. Until probate is opened, your brother's interest in the property remains clouded. You cannot sell or mortgage the property without the consent of the personal representative.

Your next issue is whether the children are legally obligated to pay their share of the expenses. First, let's discuss the mortgage on the property. You have to carefully review the deed of trust and promissory note that you and your brother signed when you obtained your mortgage. I suspect that it says the mortgage obligation is "joint and several." That means both of you were separately obligated to pay the full amount of the mortgage. So I strongly suggest that you make the entire monthly payment. Otherwise, the lender may decide to open probate and then foreclose on the property.

The lender would not be able to foreclose on the property until your brother's interest is vested in a personal representative; that's why the lender may start probate proceedings. But if your obligation under the promissory note is "joint and several," the lender can also sue you for any nonpayment.

The bottom line is that to protect your investment, you have to keep your mortgage current.

As for the real estate taxes, you are in a similar situation. You do not want to lose the house in a tax sale, and thus, once again, you should keep the taxes current.

You should explain all this to your brother's children. They should understand that the property has value, which could be lost if the monthly financial obligations are not met. If the children do not have money to pay those obligations, you should make an arrangement with them -- in writing -- that you will make the monthly payments, but when the house is sold, any money that you have advanced on their behalf will be repaid to you out of the sales proceeds, then the balance will be divided equally. You can also consider buying out their interests.

There is a lesson to this story. Any time two people decide to purchase property together, they should enter into a written partnership agreement. That document should spell out matters such as how to divide the property if one wants out of the deal and how to deal with the death of one of the owners.

Married couples generally do not have such agreements. Should a divorce occur, the parties then have to decide how to divide their real estate holdings. Otherwise, a judge -- who knows nothing of the family history -- will make that decision.

A written partnership agreement, carefully drafted, will go a long way toward avoiding problems. Preventative law is much less expensive than prolonged litigation.

Benny L. Kass is a Washington lawyer. For a free copy of the booklet "A Guide to Settlement on Your New Home," send a self-addressed stamped envelope to Benny L. Kass, Suite 1100, 1050 17th St. NW, Washington, D.C. 20036. Readers may also send questions to him at that address.