There is an interesting question that often arises especially after the death of a relative who left no will but owned some real estate. When a property taxpayer dies owning real property the seemingly mundane process of sending a tax bill becomes difficult for the county tax office and the implications of that listing are not what most people tend to think.
Once someone dies, the listing of their property, potential exemptions, billing, and collection becomes difficult because the County tax collector is required, by law, to list the property “in the name of the owner of record” as of January 1 each year. Absent a probated will, there is no public record of the name of the owner and even when a will is in probate, it can be challenged. Without a will, it becomes even more problematic to determine who is the owner of record.
Listing the property to “heirs of so and so” is not an effective way for the tax office to bill and collect property taxes and leads to tax foreclosure issues. For this reason, the county tax offices in this state allow new owners to “self-identify”. This means that virtually anyone can self-proclaim their ownership such that the property of a decedent (dead person) is relisted to them upon signing of an affidavit with the tax office.
What some folks don’t realize, however, is that the tax office listing activity does not affect legal ownership of that real estate. I have had clients who exclaim, “I’ve paid taxes for 10 years and they took my money each time, isn’t the property now mine?!” The short answer is maybe. The property might belong to them if they have some other claim as an heir of the decedent (usually a lineal descendant of a dead person) or devisee of the decedent (someone named in the last will of a dead person). But the mere payment of taxes will not assist in any claim of right to ownership of the property.
Keep in mind that the tax office is in the business of collecting revenue for the county coffers. They do not care who pays, only that they collect. It can be costly to sort out someone’s estate between heirs or devisees but that sorting is critical to effectively pass title to assets. We advise that it’s worse to incur the tax expense only to discover you have gained no rights or title.
Shipman & Wright, LLP consistently counsels buyers, sellers, and real estate brokers and agencies on their rights, obligations, and duties under purchase/sale and agency agreements in residential and commercial transactions. If you have a need for guidance or think you have a claim. Call us!