APRIL 17, 2000 VOLUME 7, NUMBER 42
In order to avoid the probate process, or for income or property tax purposes, property owners often add children, spouses or others to the title on their homes. Sometimes those transfers turn out badly.
When Jean and Samuel Owens married in 1970, they each had children from first marriages. Jean also had something else–she owned her own home in Walhalla, South Carolina, and she had been able to pay off the mortgage after her first husband’s death. Samuel Owens moved into her house and they lived together there for twenty-five years.
For several years after they married, Samuel repeatedly asked Jean to put his name on the house. In 1983 Jean finally agreed, but only to get a tax benefit that was available to if he had an interest in the home. At the same time Samuel agreed to sign a new will leaving his interest in the house to Jean’s children, so that his own daughters would not receive any interest in the house.
A decade later, Samuel apparently decided that he wanted to renege on his agreement with Jean. Without telling her, he signed deeds transferring his interest in her house and another property they couple had bought to his two daughters.
The same day Samuel also signed a new will. His will left everything to Jean. If she died before him, it left everything to all of their children.
Samuel told the lawyer who prepared the documents not to mention them to Jean, but to send the deeds directly to one of his daughters. Along with the deeds he included specific instructions not to record them until after Samuel’s death.
Less than a year later Samuel died. The daughter who had received the deeds promptly recorded them; that was the first inkling that Jean had about the transfer of the properties.
Jean brought a lawsuit to recover the properties. She argued that the alleged transfer from Samuel to his daughters was invalid because of the instruction not to record the deeds until after his death. She also maintained that Samuel never really had any interest in the home at all, that she added his name to the deed only to get a tax benefit and only after he agreed to leave the house to her children. Jean herself died before the courts resolved her challenge.
The South Carolina Court of Appeals agreed with Jean. The judges noted that Samuel continued to act as if there had been no transfer of the properties even after delivery of the deed. He and Jean had even signed a sliver of one of the properties over to a neighbor to settle a boundary dispute, which tended to show that he thought he still owned his interest outright. The transfers were set aside, though at a substantial legal cost and not until years after Jean’s death. Because of Samuel’s will, all the property passed to Jean’s estate. Estate of Owens v. Mariner, April 3, 2000.