Presentation is loading. Please wait.

Presentation is loading. Please wait.

 Two types of possible protections:  Against being reached to pay the claims of most creditors.  Ability of surviving spouse and minor children to.

Similar presentations


Presentation on theme: " Two types of possible protections:  Against being reached to pay the claims of most creditors.  Ability of surviving spouse and minor children to."— Presentation transcript:

1

2  Two types of possible protections:  Against being reached to pay the claims of most creditors.  Ability of surviving spouse and minor children to occupy the homestead.

3  What is it?  The home you own in which you live ▪ Renters do not have homestead rights.  Size ▪ Rural = 200 acres (family), 100 acres (non-family) ▪ Can be separate parcels ▪ Urban = 10 acres ▪ Must be contiguous parcels

4  How big is it?  Rural = 200 acres (family), 100 acres (non- family) ▪ Can be separate parcels  Urban = 10 acres ▪ Must be contiguous parcels

5  How much is it worth?  No limit on value!

6  Creditor protection upon death  PC § 270  EC §  Condition = must be survived by either: ▪ Surviving Spouse, or ▪ Minor child

7  Creditor protection upon death  General Rule = homestead cannot be used to pay most of the decedent’s creditors: ▪ Credit cards ▪ Utilities ▪ Tort claims ▪ Contract claims ▪ Student loans ▪ Article 9 creditors

8  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead

9  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead

10  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead ▪ Improvements on homestead

11  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead ▪ Improvements on homestead ▪ Owelty of partition upon divorce

12  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead ▪ Improvements on homestead ▪ Owelty of partition upon divorce ▪ Federal tax lien (e.g., unpaid income taxes)

13  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead ▪ Improvements on homestead ▪ Owelty of partition upon divorce ▪ Federal tax lien (e.g., unpaid income taxes) ▪ Refinancing of above liens

14  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead ▪ Improvements on homestead ▪ Owelty of partition upon divorce ▪ Federal tax lien (e.g., unpaid income taxes) ▪ Refinancing of above liens ▪ Certain home equity loans

15  Creditor protection upon death  Exceptions = homestead may be reached to pay these creditors: ▪ Purchase money mortgage on homestead ▪ Property taxes on homestead ▪ Improvements on homestead ▪ Owelty of partition upon divorce ▪ Federal tax lien (e.g., unpaid income taxes) ▪ Refinancing of above liens ▪ Certain home equity loans ▪ Certain reverse mortgages

16  Occupancy right of surviving spouse  Until abandonment or death, whichever comes first.  Can live in homestead with a new partner!  Duties similar to those of a life tenant ▪ Pay property taxes ▪ Maintain home ▪ Pay interest on mortgage

17  Occupancy right of minor child  Until reach age 18.  Duties similar to those of a life tenant.

18  Title to homestead  Passes under will or to heirs regardless of who has the special occupancy right.

19  Persons entitled:  Surviving spouse  Minor children  Unmarried adult children living at home  Adult incapacitated children

20  Maximum exempt value  $60,000  [if no family, while alive, $30,000]

21  Property exempt under Prop. Code § :  Home furnishings and heirlooms  Food  Clothes  Jewelry (not to exceed 25%)  2 firearms  Sporting equipment  Car or motorcycle for each family member  Specified animals (12 cows, 120 birds, 2 horses, pets)  Life insurance surrender value  Current wages  Many others

22  If Estate is Insolvent  PC § 279  EC §  The exempt property claimants take title to the property free and clear of creditors, heirs, and beneficiaries.

23  If Estate is Solvent  PC § 278  EC §  The exempt property passes to the heirs and beneficiaries (not the exempt property claimants).

24  Homestead  PC § 273 = $15,000  EC § = $45,000 as of 1/1/14  Exempt personal property  PC § 273 = $5,000  EC § = $30,000 as of 1/1/14

25  Entitled Individuals  PC § 286  EC §  1. Surviving spouse  2. Minor children  3. Disabled children but, as of 1/1/14, only if decedent was actually caring for the child.  No allowance for adult child who still lives at home.

26  Condition  Entitled individuals cannot have property of their own adequate for support.

27  Amount  Amount needed to support entitled individuals for one year after the decedent’s death.  Thus, depends on the facts.

28  Amount  Amount received does not reduce intestate share or gift under the will.  Not treated as advancement or satisfaction.  Treated as a debt of the estate which has significant priority.

29  In re Estate of Rhea, 257 S.W.3d 787 (Tex. App. – Fort Worth 2008, no pet.).


Download ppt " Two types of possible protections:  Against being reached to pay the claims of most creditors.  Ability of surviving spouse and minor children to."

Similar presentations


Ads by Google