The Oklahoma Supreme Court has sided with the owner of land that was sold by the County for unpaid property taxes.

The facts were not in dispute:

-The property owner obtained title to the property in 2001;

-The owner stopped paying property tax In 2006;

-The County sold the property for unpaid taxes in 2010, after publishing notice under the statute, and certified mailing notice to the address provided by the owner;

-The owner had moved away from the property prior to 2010;

-The certified mail was returned marked “Not Deliverable as Addressed. Unable to Forward.

The Supreme Court held that bare compliance with the service statute was insufficient in this case.  To pass constitutional muster, the County must look to see if actual notice can be achieved in some other way. The fact that the tax sale purchaser was able to contact the owner after the sale indicated that the difficulty of giving actual notice in this case would not have been great.

In spite of the ruling in this particular case, property owners should be warned that if your mailing address is different than the property address, the owner should notify the County Assessor and Treasurer of the proper mailing address. If a Court makes a determination that the County reasonably did all it could, the property could be lost. Even if successful, consider the thousands this owner spent recovering the property, at which point he then had to pay all the back taxes with interest.

Find more information at the Oklahoma Law Website

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The Risk of “Do It Yourself”

I encounter it frequently.  Well meaning and well-intentioned people who only want to do what the law allows – avoid probate or taxes.  Unfortunately, these well meaning people all too often rely on their own Google research, or the advice of other well meaning people (friends, family, co-workers).

Here is a quote from Bankruptcy Judge Terence Kern in a recent matter decided in Tulsa:

Whether for carpentry or estate planning, it is usually a good idea to use the right tool for the job.  Unfortunately, when it comes to estate planning and asset transfer, people are often ill-informed about the tools available to them and the perils of choosing the wrong one.  If a parent wants to gift an asset to a child only upon the parent’s death or incapacity, state law provides tools to accomplish that end.  Unfortunately, use of the wrong tool could unwittingly result in a present transfer and the unintended loss of the asset.

In the case before Judge Kern, a couple had transferred their home to their daughter by Quitclaim Deed.  The purpose was to avoid Probate after they passed.  The couple continued to make all insurance and tax payments on the house, as well as all repair and upkeep costs.  When the daughter declared Bankruptcy, the couple argued that the intent was to create a trust, where the couple retained all “equitable” interest and the daughter received only “naked legal title”.

Unfortunately for this couple the bottom line is that Judge Kern ruled that the Bankruptcy could seize and sell the couple’s home – not because the property was conveyed to the daughter, but because of the way i was conveyed.

There are ways to avoid probate that will not put the property at risk, keeping in mind that if the real intention is to keep the property from the State in the case of a Nursing Home stay, such transfers may be incredibly difficult or even impossible.  As with carpentry, the discovery that the wrong tool was used may come too late.

Find more information at the Oklahoma Law Website

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New Year’s Resolution – Estate and Medical Planning

One of the most common comments that I hear from clients in divorces, real estate transactions, HOA Disputes and adoptions, is :I need to make an appointment to discuss a (here you can insert “will”, “trust”, “Power of Attorney”, “property”, etc.).  I actually hear back from less than 5 percent of them.  The phrase “out of sight, out of mind” seems truer every year.

I also find that part of the hesitation is an embarrassment that the person is not more knowledgeable about the estate and end-of-life tools that are available.  Here is a list of the major items, and some considerations for each:

Will:  A will is a written set of instructions to a person or persons (the executor) relating to disposition of the property left behind.  A will has no legal significance whatsoever unless and until it is introduced in court by way of a Probate action.  Only an original will may be introduced to the Court.  It can be “holographic” (entirely written, dated and signed by the hand of the person making the Will), or “statutory” (executed in the presence of two witnesses that have no interest in the estate and a notary).  The property that belonged to the deceased becomes property of the “estate” and the executor has the power to dispose of or distribute, property of the estate.  If a person dies owning property without a will, then someone must petition the Court to be the representative of the estate (the Administrator), and a statute specifies how the property is to be distributed. (Which varies depending on whether or not the deceased was married or not, had children or not, etc.).

Trust:  A trust is a legal entity, capable of owning property and conducting personal and professional business.  The person(s) creating the trust is/are the Trustor(s).  The person authorized to act on behalf of the trust is the Trustee.  The Trustor and the Trustee may be one and the same.  The persons who will ultimately receive the Trust property are the beneficiaries.  After the Trust is created, the Trustor(s) transfer their property to the Trust.  When the Trustor dies, there is no need for probate, as the successor Trustee will take over the duties, and distribute the property per the instructions of the Trust document.  The Trust is more expensive than the Will, but it is less expensive than a probate, and the transition of ownership of the property is seamless and immediate.  Issues other than probate avoidance (such as protection from creditors) involve more discussion and more restrictive choices).  Aside from probate avoidance, many have considerations of immediate distribution.  Some fear that transferring a sizable amount of money/property to their next of kin may not be advisable, as young adults are not always ready to handle such an amount.  For these people, the Trust can designate that their heirs will only receive the property in installments over time, or upon the attainment of a certain age.

Joint Ownership:  Certain property (bank accounts, land, motor vehicles, etc) can be jointly owned so that title to the property passes immediately to the survivor upon the death of the other.  This avoids probate, but can only be used when there is only one beneficiary, such as an only child.

POD/TOD:  Bank Accounts, 401(k) accounts, brokerage accounts, or other monetary holdings can be transferred by the “POD” (Pay on Death) provision of the account.  Simply notify the Bank that you want to have a designated POD and the bank can provide you with the paperwork.  Land can be distributed by way of the TOD (Transfer on Death) Deed.  Once recorded, this Deed allows the survivor to record an affidavit within 9 months of the death of the property owner, which vests full title in the survivor.  The TOD Deed only takes effect if it is recorded prior to the death of the owner, the owner still owns the property at death (the owner has complete ownership, and can sell or give away the property prior to death), and the Deed is still effective at the death of the owner (it may be revoked at any time by recording a revocation).  The property is still subject to any liens or mortgages on the property at the time of death, and the successor must satisfy the encumbrances in order to take full title.

Also related to the TOD Deed is the “Dresser Drawer” Deed.  In this case, the owner executes an actual Deed to whoever the owner wants to have the property after death.  The property then belongs to the successor as soon as the Deed is delivered to the successor.   With this arrangement, the successor agrees not to record the Deed until the owner dies.

Another important consideration for most people is the conduct of their personal and medical affairs if they lose the ability to make decisions.  This can be due to catastrophic illness or injury, or conditions related to aging.  A different set of tools are available to plan for such events.

Power of Attorney:  A Power of Attorney (POA) transfers to another (the Attorney in Fact), the authority to take action on behalf of the maker of the POA.  It can be “General” (taking effect immediately, but losing power upon the mental incapacity of the maker), “Durable” (only taking effect upon the mental incapacity of the maker, but lasting until the death of the maker) or “General/Durable” (taking effect immediately and remaining in effect if the maker loses mental capacity).  All POA’s can be revoked by the maker at any time, so long as the maker has mental capacity.   All POA’s lose effect totally upon the death of the maker.  The attorney in fact cannot do anything under the power upon the maker’s passing.  Another important consideration is that only a person with mental capacity can make a POA.  If mental capacity is lost, creating a POA is no longer an option.  The only option at that point is to seek a Guardianship through the District Court.

Medical POA:  The Medical POA grants the Attorney in Fact the authority to make medical decisions, which may include end of life decisions, on behalf of a person who does not have the capacity to make such decisions because of debilitating illness or injury.  An important consideration is to insure that HIPPA language is as broad as possible so that the Attorney in Fact has the ability to access necessary medical records, and receive full reports from the health care providers.

Advance Directive:  The Advance Directive, sometimes called a “living will” is a document that explains the makers wishes if the maker is ever suffering from an “end of life” condition, and is not capable of communicating decisions to health care providers.  The Oklahoma form also provides for anatomical gifts and the appointment of a health care proxy (person empowered to make medical decisions for the maker).  Once completed, this document should be provided to the maker’s primary care physician and/or the designated health care proxy.

The POA, Medical POA and the Advance Directive (or any combination of two of them) can be combined into the same document, but can only be for one individual.  There cannot be a joint document for both husband and wife.

For additional information related to Estate and Medical planning, please call me at (918) 258-2711.  You can also follow me on this blog and Twitter.

Find more information at the Oklahoma Law Website

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A Summary of Oklahoma Foreclosure Law

The foreclosure process in Oklahoma is often confusing and frightening to anyone who experiences it for the first time. There are a few things to remember.

First, there are almost always options, particularly if you get help early in the process. Second, there are resources available. Finally, providers of legal services are catching up to the big lenders in terms of being able to prevail in Court on issues involving unfair and predatory practices.

The actual foreclosure process begins before the lawsuit is ever filed. The members of the lending industry have set up a system where foreclosure debts are sold or transferred electronically, without actually transferring the paper that was signed by the borrower. Mortgage lenders have created a corporation called MERS (Mortgage Electronic Registration System) that keeps track of all the transfers. When a lender decides to initiate foreclosure proceedings, MERS determines who actually owns the note and starts the paperwork to transfer that paper to the actual owner of the note. Many times, lenders would start the foreclosure proceeding before the notes were signed transferring the debt to the foreclosing party. In Oklahoma, this is strictly prohibited.

The first step in the actual foreclosure process is the filing of a petition in the County in which the property is located. Notice must be given (by serving a copy of the petition and a Summons) to any person or company that may claim an interest in the property. This includes the owner(s), anyone with a lien or mortgage on the property, the Homeowners Association or renters. Getting every Defendant served with the appropriate paperwork often takes time, and affords a window of opportunity to act.

A party who is served has 20 days from the date of service to file a written Answer to the Petition, and an additional 20 days can be reserved if the first response is filed within the first 20 days. Many Defendants make the mistake of letting this deadline pass without filing an Answer, and Defendants also need to realize that even if the deadline passes, there are still possibilities to get an Answer on file. It is essential to consult an attorney as soon as possible after being served, or upon learning that a foreclosure action has been filed. The most common mistake Defendants make is failing to consult an attorney for fear of the cost. Many attorneys offer a free initial consultation which can be very enlightening, and often will dispel many fears. If the Defendant is truly without resources, he or she may qualify for Legal Aid. Another resource nay be available through the office of the Oklahoma Attorney General. Persons may qualify for a voucher that can be redeemed for up to $5,000.00 in legal services with a qualified attorney. Many attorneys have been specially trained at intensive 2-day seminars sponsored by the Attorney General and Legal Aid Services of Oklahoma.

Any Defendant that fails to file an Answer waives the right to be informed of future proceedings. This means that after being served, months could go by with no indication of what is happening, followed by the unannounced arrival of Sheriff’s Deputies ready to forcibly remove the borrower from the property. Even if the borrower has no defense, it is important to file an Answer so that the borrower is entitled to notice of everything taking place up to the moment the authorities arrive.

After all Defendants have either answered, or let the Answer deadline pass, the matter moves into the “Discovery” phase. In many ways, this is the most critical phase of the litigation. This is the stage where the borrower, through his or her attorney, can obtain documents and information from the person bringing the foreclosure action. The borrower’s attorney has the ability at this stage to determine if the Plaintiff is the actual person or company entitled to bring the foreclosure action, and whether the Plaintiff completed all of the actions that are required prior to filing a foreclosure action. In some cases, the foreclosure action will be dismissed outright. In other cases, the litigation will be placed on hold long enough to allow the borrower to make arrangements to reinstate the mortgage, or take advantage of remedies through the Bankruptcy Code. Look for an attorney with a good working relationship with a local Bankruptcy Attorney.

While a qualified Foreclosure Defense Attorney may be able to secure real relief in many cases, there will still be many cases where the Plaintiff will survive the Discover Phase, and the case will move to ultimate foreclosure. In these cases, there may be little more that can be done, except make sure that all steps are carried out in full compliance with the law. The final steps are:

Judgment; Where the Court determines who is liable for the repayment of the amounts due on the note, the priority of the lienholders, and who is entitled to possession of the property;

Sheriff’s Sale; The property must be appraised by three landholders in the County, and the sale price can be no less than 2/3 of the appraised value. An attorney can use available resources to contest the appraised value, which is often often generated by a panel of 3, chosen from the Sheriff’s list of approved appraisers;

Confirmation of the Sheriff’s Sale; This is the final “drop dead” deadline. At any point prior to the Confirmation, the borrower may “redeem” the property by paying the full amount of the judgment and court costs. Once the sale is confirmed, the Plaintiff becomes the owner of the property, unless the Plaintiff executes an assignment to FNMA or HUD;

Writ of Assistance; Unless the Confirmation Order grants the borrower an amount of time to vacate, at any time after the Confirmation Order, the Plaintiff may obtain a Writ (Order) directing the Sheriff to dispossess (evict) the occupants of the property;

Deficiency; Within 30 days of the Order Confirming the Sheriff’s Sale, the Plaintiff can ask the Court for a Judgment for “deficiency” (the difference between the judgment amount and the purchase price at the Sale). Oklahoma has an “anti-deficiency” statute that will provide at least some protection at this point.
For information about the Oklahoma Attorney General’s Foreclosure Assistance program, follow this link,

If you have additional questions, you should consult a real estate attorney in your area. If you are facing foreclosure or have questions in Tulsa or Wagoner County, you can e-mail me or call (918) 258-2711.

Forget Price. Think About Value.

I was visited by a gentleman yesterday who had read a piece in a magazine.  The article recommended getting lien waivers from the contractor and all subcontractors and suppliers whenever one has work done to their real property.   This particular gentleman had agreed to a remodel costing around $13,000, but there was no provision for lien waivers.  He wanted to know if it could be done now that the remodel was almost complete.  Although I had to tell him it was too late to insist on a contract for waivers, I was able to draft a receipt and waiver for him to use when he makes the final payment.

A lawyer might charge 3 or 4 hundred to draft a lien waiver agreement, the value of such an agreement is much greater.  Whenever a person or company provides work or goods to be used in the improvement or repair of real property, that person or company becomes entitled to a lien on the property to secure payment for the goods or labor provided.  This applies to subcontractors and suppliers as well.

Let’s use a room addition to a house as an example.  The homeowner enters a contract with a contractor for the addition of a room to a house.  The contractor buys the lumber, paint, insulation, etc. from a home improvement store.  The contractor then hires subcontractors (framers, electricians, plumbers, etc) to do the specific work.  If the contractor does not pay the store, or the electrician or plumber, that store, electrician or plumber can file a lien against the real property where the job was done.  The store, electrician or plumber can then foreclose on the lien, effectively requiring the homeowner to pay for items or work which was to be paid by the money given to the contractor.

When you have work done to your home, it’s always a good idea to consult an attorney to review any contract before you sign it, and make sure that the contract provides for appropriate receipts and lien waivers that cover the principal contractor, and any person or company that will provide labor or goods to the job.  Another key point is to ensure that the contractor and subcontractors carry valid workers compensation insurance, or have the proper certificates of no coverage, issued by the Oklahoma Department of Labor.

Other posts about this and other topics of Oklahoma Law can be found at myOklahoma Law Website.