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Episode 34: Deeds Defined: What They Are and Why They Matter image

Episode 34: Deeds Defined: What They Are and Why They Matter

E34 · One Of Us Knows What They Are Talking About And The Other One Is You
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6 Plays1 month ago

This week we're diving into the world of deeds and property ownership. Learn the ins and outs of real versus personal property, and uncover the common mistakes that could cost you. We'll break down certain deed types like Transfer on Death (TOD) and Ladybird Deeds, showing you how they can streamline the process and protect your assets.

But here's the kicker: while deeds might seem straightforward, they come with complex implications. We’ll discuss why professional legal guidance isn't just helpful, it’s essential.

Don't miss out! Tune in this week to ensure your property planning is on point.

Join us every Wednesday for new episodes! Subscribe now to get notified.

Where you can find Burch Law:

Visit burch-law.com/podcast to reach out!

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Transcript

Introduction to Wills, Trusts, and Probate Law

00:00:03
Speaker
Welcome to another episode of One of Us Knows What They're Talking About. Another one is you. I'm Lori Burch, your host. Join us as we discuss and unpack wills, trust, estate planning, and probate law in a way that's actually informative, interesting, and well, hopefully entertaining. Because if you don't have a will, the state of Texas has one for you. Let's dive in.

Understanding Deeds with Humor

00:00:39
Speaker
The main topic that we're tackling today is deeds.
00:00:50
Speaker
So deeds. Oh, I should have Sarah. Sarah to find deeds, but it's okay because I think part of your stick is you don't actually know what I'm talking about. I don't and I've been too afraid to ask.
00:01:05
Speaker
Wait, seriously? yeah I don't know what it did a A deed for our purposes in the legal world. Oh, wait. I'm looking at my Duolingo notification. Okay. My hearts are full again.
00:01:18
Speaker
right Um, the legal definition is that the de legal document that conveys an interest in real property. Oh, this is good. This is good. i thought This wouldn't be a good topic, but here we are. Um, Sarah, can you tell me the difference between real property and personal property? And is there any other type of property besides real and personal property?
00:01:51
Speaker
ah So, boy, and personal property belongs to your person. It is your property. Okay. I like it. Real property is, um, Oh God. Just go with your heart. I mean, you're going to be wrong no matter what. So it might as well be something. It's property that is real.
00:02:20
Speaker
Cough out? Yeah. I don't know. I think she doesn't know. No, I know. But I was expecting like some more than that. I thought she was gonna say, the way you're like, is for your person. I was like, oh, she's gonna say that like real property is for your estate. Like I... No. No. And then she, yeah. And are there other types? That's why I'm here.
00:02:43
Speaker
time
00:02:46
Speaker
Sarah, sometimes I feel like we don't deserve you. Yeah, and other times I think you don't deserve us. ah No, um, yeah, it's so real property is like land real estate.
00:03:08
Speaker
oil, mineral interests, all of that. Anything that's not real property is basically personal property.

Real vs. Personal Property Explained

00:03:16
Speaker
I don't, this is one of those things in the law I don't particularly like, but that really is kind of the case. So personal property is even like a car, bank accounts, and your Nickelback ah collection. Do you have a Nickelback collection? I have one shirt.
00:03:37
Speaker
one sure okay fine ah One way that I've heard this described is property that is not movable. property that you cannot like move about. So anything that's attached to the ground. So what is a motorhome? I was going to say it's like a tiny house that you can move. Technically, those are classified a little bit differently for like, we've had that issue before with probate, where mobile homes are classified differently than um it it depends. and with If you're in a mobile home park, you need to know does it have a legal description or does it have a VIN number?
00:04:14
Speaker
How do you know if your mobile home is real or personal property? Is there a VIN or is there a legal description? That's a starting point. Interesting. can you Hey, Sarah, what's a VIN? It's a little number for your vehicle. V-I-N. What's it stand for? Isn't it just vehicle identification number? Yeah. Good job. Why didn't that come up in our acronyms?
00:04:43
Speaker
episode. That's an everyday one. They needed something. Part two. We need a part two. and Not memorable. What does FBI stand for?
00:04:55
Speaker
but does the si stand to What What does NCIS stand for? I'm just mentioning all the shows that your parents probably watch. Siri? and yeah She wanted to get in on this. Hey, Siri.
00:05:09
Speaker
No, she can't hear you oh hear no hear you. Oh, I heard mine. She said, uh-huh. ah Alexa, are you friends with Siri? I only know them by reputation. I only know them by reputation. Ooh. No. Ooh. That sounds like beef. So deeds are really something that has to do with the conveyance of real property.
00:05:39
Speaker
conveyance. Do you know what that is, Sarah? By the way, if anybody is like thinking like we like we're insulting Sarah's intelligence, we are not. It's really twofold. One, she gives the best definitions of things. That's why we do this. Two, she's the only one at Birch Law that has nothing to do with client work, legal production, nothing like she's completely removed from any of it.
00:06:06
Speaker
Although I would dare say she knows more substantive law than a lot of people that a lot of other people, not in our firm, but work in other firms or certainly clients. Um, but I don't want anybody to think, well, and third, she's really fun to tease.
00:06:26
Speaker
Yeah. Yeah. So it's threefold. She's good at definitions. She has nothing to do with legal work. And she's she's really she's like if we had a birch law award, which we should that's an idea we should do in a year. Yeah, we should. Sarah would get a lifetime achievement award for being a good sport. She would because you know, there are people at our firm that could not take a 10th of the teasing that we do of you.
00:06:57
Speaker
That's fair. They would quit and say, it's not right for me to be crying on my way home. That's hypothetical. Nobody actually ever said that. That's never happened. That's never happened. My point, even though that never happened, but my point in case it ever did is you should cry while you're at work because then you're getting paid to cry. Yeah, during the clock. And Yeah, and i condote as an employer, I can dome that. I also wonder why anybody thinks they're entitled to not cry on their way home from work.
00:07:39
Speaker
ah Sarah, have you ever cried on your way home from work? At this job? Yes. and I don't think I have, no. okay And it has to be work related. It can't be something going on in your personal life. Yeah, no. Okay, okay. Sam, have you ever cried on your way home from work at Birch Law? ah Not this job, but my own job I did quite frequently. Oh, we know. That's why we like half your salary offer because we basically figured you'd pay us to work here. yeah but
00:08:13
Speaker
We'll call that, but just go with it. Well, part part of what's true, whats the part that's not true is that's not true about the salary. The part that is true is we knew she was pretty desperate to work for us yeah and to not have the job that she had. It was like too full. It was like a perfect storm, if you will. Honestly. Cynthia, have you ever, well, have you ever cried? It happens every now and then. It's rare. I have to be right at the perfect like breaking point and then it'll happen.
00:08:45
Speaker
Yeah. So have you ever cried on your way home from work where it's work related? Not here. Okay. All right. See? So it's a good sign. Yeah, I would say so.

Legal Advice on Property Deeds

00:09:00
Speaker
So deeds.
00:09:02
Speaker
I think if i if i wanted if I wanted the general public to know anything is that um one of the biggest mistakes we see with people is that the idea of of creating a deed and even getting a deed recorded in the county where the property is located is fairly easy and readily available. But it's not you really need sound legal advice whether it's something you should do.
00:09:30
Speaker
yeah because a lot of people think that, oh, you know, i I want my kids to go ahead and have this property. Let me just go ahead and deed it to them. And then that means they own it. So you might lose your homestead exemption. um If they they have any issues, then that's a personal asset of theirs and it's not protected from an asset standpoint. But another thing is, and I don't want to explode Sarah's head, but with inherited property, you get what's called a step up in basis. So if you purchase a home, let's just do ah a generalization. There's lots of ifs, ands, or buts with this.
00:10:09
Speaker
But if you purchase a home for $100,000 and if you then gift it to somebody and it's worth $300,000 at the time that you gift it, then that's a $200,000 increase in value and there can be capital gains tax paid on that.
00:10:26
Speaker
If you instead inherit a property that was originally purchased for $100,000 but is worth $300,000 at the time that you inherit it, you get a step up in that basis, meaning your basis is $300,000. And if you turn around and sell it for $300,000, you have no capital gains tax to pay.
00:10:46
Speaker
So something that happened around here or does happen, actually, but happened around here is there was some property up in this ah underdeveloped place north of Dallas called Frisco. That was like worthless farmland that this guy decided, let me go ahead and just deed it to my kids because they're going to get it anyway. And then by the time he died,
00:11:11
Speaker
it there was a tollway running through it. So it was very expensive property. So when they inherited it, even though they didn't inherit it, actually, when he died, I should say they already had it in their name. And then they had the original value rather than the millions of dollars that it was worth then. And they have all those extra taxes to pay on.
00:11:34
Speaker
So there's also Sarah. Right. So I mean, it's it's there's a light bulb so sort of going on. Don't overdo it, Sarah. I know you don't know. I understand what I just said, but.
00:11:47
Speaker
But that that's the point is even though there are legal tools that are pretty easy to figure out and and they really are. That is something that you need to understand. Also, there's gift taxes. Are you gifting it? Are you selling it? So the other thing that is somewhat of a no no is. Sometimes people you need to stop googling, at least for legal stuff, just stop like the quit claim deed, which, by the way, it's not a quick.
00:12:16
Speaker
claim deed. It's it's sort of not a thing that exists in Texas. And it's sort of not a thing like all these different warranty deeds, general warranty deeds. I mean, there's a lot of things that can happen with a property. Are there easements? Are there liens? Are there all these other things? And what that terminology of quitclaim, general warranties, specific warranty, warranty deeds have to do whether the person who is giving you the property, whether for a gift or by sale, is saying that they will warrant to you against any future claims. I mean, oh like we could talk about adverse possession, or there's actually, if you go to law school, which I really hope none of the three of you do,
00:13:05
Speaker
um But part of like the fascinating like real property is probably one of the more interesting classes to take basically because there's all sorts of things of easements and then what's the thing where the government can take your property um imminent domain.
00:13:23
Speaker
I'm in a domain and there's adverse adverse possession so you could just go and it's kind of that thing that I was reading earlier which sarah probably will edit out but where it talks about squatters rights where you basically can go and like take over a property and there are ways where it can become yours just by existing there um there's another ah what are the other things or easements like you really need to make sure when you're purchasing property that you look at the um utility the abstract that's one. Yeah. So you know, like what you share with your neighbor and everything. And if you're like going over in their land and everything. So it's, it's actually, while the deeding of it is very, very precise or or very easy, ah getting into real property disputes can be a real issue. Did, did somebody have something to say before I talk about specific types of deeds?
00:14:16
Speaker
No, just one thing I would like to add, kind of unrelated, but related. Going through to get the paralegal certificate that I have, or ah it we did like a ah whole semester on property law, and whenever you start talking about implied easements, it gets real fun. Covenant, that's what I was trying to think of. Easements and covenants. We could also talk about fee simple. Sarah. A fee simple estate.
00:14:48
Speaker
doesn't ring a bell. Yeah. It's dumb. So anyway, it it's more complicated than you realize, and it's more it's easier to screw it up than you realize. So um a couple of the types of the types of deeds that we see in Texas that there's lots of discussion about. So the main takeaway is make sure that even if you're not in Texas, ah make sure that you're consulting with a knowledgeable ah estate planning and or realistic attorney to guide you through this.
00:15:21
Speaker
But in Texas, we do have something called a transfer on death deed. And those are nice. It's not a one size fits all, but it's a nice thing to add to your your toolkit because it does have the ability to avoid probate, where you can go ahead just for a specific property, say, um upon my death, this property goes here.
00:15:42
Speaker
And you can actually do a transfer on death deed to a person, to charity, or even to a trust if you have a trust. So if the idea is to avoid probate, that can be a nice way. It's completely revocable. um There's nothing that encumbers your home so that you can't sell it during your lifetime. Even the title companies will try to claim that. That's why you've got to have a go-to firm on your side. We also have a little thing in Texas called a ladybird deed.
00:16:09
Speaker
which not all states have that. Not all states have the transfer on death deed, but a ladybird deed also called an enhanced life of safety. The primary concept behind this is that a homeowner can basically go ahead and pre gift their home to somebody.
00:16:28
Speaker
Upon their death, but they retain the rights to live there during their life and you can revoke that And one of the biggest benefits to that is not only avoiding probate but you can avoid medicaid um from coming and claiming any um Anything from the home upon your death Yeah, how are we doing? We are joined by our special guest today. Adley Louise birch canter and She asked me earlier if I talk about her on the podcast, and I said, I do a lot. And she said, don't talk about me, talk about you. And I said, well, you're part of me. I don't know how to talk about me without talking about you. And now she's hiding. I don't know what's happening. OK. OK. So anyway. Thank you.
00:17:16
Speaker
Any other thoughts or input about deeds that we could go more and more, but I think that gives people a general understanding of some pitfalls and things that they should be looking for.
00:17:27
Speaker
Just don't do it yourself, people. Just don't do it yourself.

Estate Planning in Texas

00:17:31
Speaker
I will add one other little wrinkle for Texas because it has to do with real property laws is that Texas doesn't have what's called joint tenancy or what's called joint tenancy with rights of survivorship. So when a married couple, for example, purchases a home in Texas,
00:17:48
Speaker
Even if both names are on it, even if it's during the marriage with community property, we don't have the thing, the joint tendency where if one passes away, it automatically goes to the other. We only have what's called tenants in common, which means it doesn't mean that the surviving spouse is going to get it. Don't freak out on us. It just means you're going to be spending a lot more time and money to do that. So don't do that.
00:18:11
Speaker
Make sure that you have either done a will, a trust, a transfer on de transfer and death deed, whatever your esteemed estate planning attorney has advised you to do. by You're leaving forever?
00:18:29
Speaker
Did you all hear that? Yeah. yeah Okay. um Other thoughts or input on that? So we told Sam and Sarah that the topic today was about deeds. And how did you all interpret this? We listed some bad deeds to do for or to your coworkers. Oh. Because I still don't know what a deed is. Are you any closer now?
00:19:02
Speaker
a little bit, but it's going to take a while. Or is it just going to take away the nonsense because I didn't look at the stuff that you listed in our chat. I just get to be surprised. Yeah. Yeah.
00:19:17
Speaker
You're going to have some questions. okay Do you want us to rapid fire them and then you ask questions after, or is it going to be where we say we're going to rapid fire? yeah I really didn't look. So it says, does this lends itself to rapid fire? Does it lend itself to, let me ask a question after each one. I think i think rapid fire. Yeah. i means always trying to do right ah rabbi So bad deeds, you can do four or two your coworkers. Number one, deadlagging your coworkers.
00:19:49
Speaker
Ding Dong ditching them at their office door. Coming into their consult and yelling at them. Eating half of their lunch because they've mentioned that they're really excited for it all week. um And you you know, you just want to make sure that it's not poison. Right. Siphoning their gas.
00:20:09
Speaker
This one's a long one. exploding confetti in disguise is a completely normal package that they open at the end of a really bad week, which then has a cryptic first note of a seven hour s scavenger hunt to find their keys in the note, written in a dead language and suddenly their phone is missing and the wifi isn't working. At the end of a but really bad week, um, covering their office completely and wrapping paper. Uh, but there's a slight catch. Everything under the wrapping paper is also covered in a lot of fine sand.
00:20:38
Speaker
And then the last one, cover their car completely in post-it notes. Okay. What was the topic again? Deeds. So these are bad deeds that you can do two or four. These are all like two, a co-worker. These are all pretty nefarious. um what What is deadlaying your co-workers?
00:21:00
Speaker
You know i don't like when you go up behind them and you like you like kick them in the back of the knee or something, don't ever do that to anybody here, please. Thank you. I think that would follow fall under horseplay in the employee handbook. Horseplay not a rat. I like how everything for you is horseplay. There's also a no fighting. It's in our handbook.
00:21:25
Speaker
It is, but there's really a new course play. You want everything to fall under course play. We're not encouraging these. And nobody has a doorbell at their office. No, you just knock. well You cannot. Or yow ding dong. It should be yeeted.
00:21:48
Speaker
Yeat. ye You just gotta do it and then run. Yeah. Please don't. Okay. I do. I do like coming to their consults and yelling at them. Please don't do that.
00:22:05
Speaker
Um, siphoning their gas is pretty shit. Uh, eating half their life. Exploding confetti in dis- Yeah. That one wasn't too hard. That no he's a team effort. I just kept building on it from Sarah's original exploding confetti, and she just didn't stop me. so it just You know what, Sarah? One day next week, I am going to hide your keys. And we'll see how that goes.
00:22:30
Speaker
Honestly, she's probably not gonna do this. Please don't make it a seven hour scavenger hunt. It was originally four, but then again, she didn't stop me, so I just raised the timer. I feel like if you know me, you know exactly where I'm gonna put them, so it should take you like a few seconds.
00:22:48
Speaker
All right, so that's an example of good and bad deeds that can or can be done. And good luck, Sarah, editing this one.

Closing and Call to Action

00:23:00
Speaker
Thanks for listening. And just to cover all our bases about what you just heard, I'm sorry and you're welcome. Make sure you subscribe so you never miss an episode and tell your friends about us. We do webinars and live events.
00:23:16
Speaker
The best way to stay up to date is to follow us on Instagram, Facebook, TikTok, and YouTube. Links are in the show notes. If there's a topic you'd like us to cover, maybe you have a question you'd like us to answer, or maybe you just wanna say hi, hit the link in the show notes or go to birch-law.com forward slash podcast and fill out the contact form.
00:23:46
Speaker
much better. Yeah I thought that had a lot of energy.