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Cloudy title, heirship property, and hurricanes

Heirship Property, Cloudy Title, and HurricanesAfter Hurricane Katrina, 20,000 people with claims to heirship property with “cloudy” title faced difficulty getting government aid to rebuild, because they couldn’t prove they owned their homes.

What is heirship property and cloudy title?

If someone dies without a will and if a deed to his or her property does not expressly include joint tenancy with survivorship language, issues may arise as to who should have title to that property, as well as the percentage of each person’s ownership interest. Such property is often referred to as heirship property. Because there is no clear paper trail documenting who owns the property, lawyers call this a “clouded” or “cloudy” title.

Lots of low-income families don’t have access to the legal help they need to pass title to their homes. One study that looked at over 1000 homeowners in low-income communities in Texas found that 90% of them didn’t have wills, mainly because of cultural norms and lack of information. In addition, people in these communities don’t necessarily go through a bank when buying or selling a house, where you have documentation and oversight over the passage of title.

Rebuilding after disaster

After Hurricane Katrina, some 20,000 homeowners found it difficult to convince the government to give them the funds to help them rebuild. Similarly, thousands of Texans after Hurricane Ike in 2008, Rita in 2005, and Dolly in 2003 faced the same problem.

What do Houston residents face as they try to rebuilt after Harvey?

The barriers are not high to get FEMA relief, which is the first level of assistance for families trying to get immediate assistance to repair their homes. For example, home ownership can be shown simply by providing evidence that the family has a track record of paying taxes.

It is the longer-term disaster recovery assistance that helps families whose homes have been destroyed and can’t be rebuilt or who need a lot of funding to rebuild them that has large barriers.

Case study

Years after Hurricane Katrina in 2005, New Orleans Legal Assistance Director Mark Moreau estimated that thousands of people with title problems still were being deprived of money to rebuild.

In 2008, 80-year-old Alice Cousin was still living in a house that was unrepaired after the ravages of Katrina . Her parents bought the house in the 1940s, and the title to the house remained in their name. The family didn’t change the title when Cousin’s parents died. When Cousin applied for government money to fix the house, she was turned down by the state-run Road Home Program, which funnels federal Katrina aid to homeowners for rebuilding.

Cousin was told that to get the money, she had to prove she owned the home or get a power of attorney from all of the other heirs. According to law, Cousin and a dozen or so nieces and nephews have a claim on the house. Although most of the relatives signed over their shares in the house to Cousin, one nephew, living in California, was initially holding out. Eventually, the Road Home Program gave Cousin $18,000 to repair the home. Cousin died in 2013.

How to prevent heirship property problems

What can families use to prevent such title problems? A simple solution is a Transfer on Death (TOD) deed. It has been adopted by about 20-plus states, including Texas. The TOD deed became codified in the Texas Estates Code, chapter 114 in 2015. With a TOD deed, an individual may transfer his or her interest in real property to one or more beneficiaries, with the transfer being effect at the transferor’s death. The TOD deed must be recorded before the transferor’s death in the deed records of the county where the real property is located. The TOD deed can also be revoked if the transferor changes his or her mind.

We are now in the peak of the Atlantic hurricane season, with category-five Hurricane Irma brewing in the Atlantic just barely a week after Hurricane Harvey devastated Houston.

It is amazing that a simple inexpensive document can prevent so much future heartache and worry.

Cloud photo by Anandu Vinod

Why is Texas a community property state?

Many know that Texas divorce courts split the marital estate, usually half to each spouse, but few ask “Why is Texas a community property state?”

Ten states and one U.S. territory recognize community property: Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, Alaska, and Wisconsin.

Five types of community property (CP) law

TraditionalCalifornia, Texas, New Mexico, Arizona, and LouisianaThese states had been either under Spanish or under Spanish and French law. Adoption of CP system was a continuation of what was already in place.
Uniform Marital Property ActWisconsinState enacted a statute similar to the Uniform Marital Property Act in 1986.
VoluntaryAlaskaState has elective CP system popularly known as an "opt in" system.
Unique adoptionIdaho, Nevada, WashingtonIdaho Territory and Washington each had a common law system before adopting the CP system. Nevada adopted CP system when thousands from California moved into the state after silver and gold were discovered.
EntityPuerto RicoUnder this territory’s law, when a couple marries, a conjugal partnership is created that becomes a separate entity with its own juridical personality similar to a corporation.
Five states used California as a model for their own community property systems: Arizona, Idaho, Washington, Nevada, and New Mexico. The California "common" system of marital property was, in turn, copied from the Texas constitution. The Texas provisions came in part from the Louisiana Civil Code of 1825.

The Visigothic code

Visigoths: Why is Texas Community Property StateThe community property system in the western United States has roots in the Visigothic Code of Spain, which was inherited through Mexico’s ganancial community system.

The Visigoths, or West Goths, were a tribe of Indo European (probably Germanic) origin. As the Roman Empire disintegrated, the Goths settled in part of Spain.

During King Euric’s (466–485) reign, the first Visigoth legislation recognizing the marital community was enacted. In 693, the general law was revised and published as the Second Visigothic Code (Forum Judicum or, in Spanish, Fuero Juzgo).

The Visigothic Code identified the existence of marital community property, declaring

“When persons of equal rank marry one another, and, while living together, either increase or waste their property, where one is more wealthy than the other; they shall share in common the gains and losses.”

In addition to recognizing this form of community property, the Code acknowledged the separate property of a married woman.

Although the Code gave women equality of ownership, the actual management of the community estate was given to the husband. In the United States, it wasn’t until the 20th century that both spouses received equal rights of management and control.

Adoption of community property laws

Below are three major factors for the adoption of community property statutes:

  • Legislators wanted to safeguard family assets from the creditors of negligent husbands. According to a delegate at the Texas Constitutional Convention of 1845, without community property, a wife “might be forced to ‘sit weeping by, and see the whole of her property wasted in midnight frolics by a drunken or gambling husband.” In California, a delegate of that state noted the that gold rush could lead “an idle, dissipated, visionary, or impractical man, [to] bring his family to penury and want.”Wives Wanted: Why is Texas Community Property State
  • Men wanted to attract women to the western frontier. A community property system benefits women who come to a marriage without property but who work hard alongside their husbands, either to create property or to increase the value of property that the husband owned before marriage.
  • The life of a frontier wife in western frontier was more like that of her Visigothic sister—hard and dangerous—than of her sister from the feudal classes out of which English common law developed. A community property system gives credence to the contribution of women who work at home by recognizing the stay-at-home spouse and providing for equal sharing of the total earnings of both spouses.

Suffrage movement: additions to the law

In Texas, the women’s suffrage movement drove the movement toward equality in rights to property. In 1911, a statute was enacted permitting a married woman to petition to have full contractual power in a business context. In 1913, an act gave wives control of their earnings and the profits from their separate estates.

Perhaps influenced by the rights already given to women from its community property law, Texas became the ninth state in the United States, and the first state in the South, to ratify the 19th amendment on June 28, 1919. Texas woman had been voting in the state’s primaries since 1918.

Probate Law, a Will Bequest, and The Woman in Gold

When drafting your will, make sure you are making a “will bequest,” not a mere “request.”

The Woman in Gold: A Will Bequest?Adele Bloch-Bauer sat for Gustav Klimt in two portraits (one in 1907, the other in 1912) and was the only model painted twice by Klimt. When Adele died in 1925, she and her husband, Ferdinand, owned six Klimt paintings: the two portraits and four additional landscapes.

When Nazi Germany annexed Austria during the 1938 Anschluss,  Ferdinand fled to Prague and then Zürich. Soldiers seized the 1907 portrait, originally titled Adele Bloch-Bauer I, from his home. The Nazis removed the original name, calling it The Woman in Gold so that it could be displayed without referring to a prominent Jewish family. In 1941, the state sold the painting along with four others to the Belvedere Gallery.

Battle of two wills

In her 1923 will, Adele had asked Ferdinand to consider donating the Klimt paintings to the Austrian State Gallery, housed in the Belvedere palace, upon his death. Specifically she wrote:

Meine 2 Porträts und 4 Landschaften von Gustav Klimt, bitte ich meinen Ehegatten nach seinem Tode der österr. Staats-Galerie in Wien zu hinterlassen”  (“I ask my husband to bequeath my 2 portraits and the 4 landscapes by Gustav Klimt to the Austrian State Gallery in Vienna after his death”).

Ferdinand signed a statement acknowledging Adele’s wish in her last will and donated one of the paintings to the Belvedere Gallery in 1936.

In November 1945, Ferdinand died in Zürich. In his 1945 will, he designated his nephew and nieces as the heirs of his estate, which included the Klimt paintings. One of his nieces was Maria Altmann, a 1938 Jewish refugee from Austria who settled in the United States.

At the heart of the battle was whether Adele’s request should or should not be considered legally binding upon Ferdinand, who was actually the owner of the paintings.

Restitution of artworks

In 1998, Austria passed a law opening the archives of the Ministry of Culture for the first time, thus introducing greater transparency into the process of dealing with the issue of restitution of artworks looted during the Nazi period. An Austrian investigative journalist discovered that, contrary to what had been generally assumed, Ferdinand had not donated the paintings to the state museum.

Turning to the law

Altmann asked the Austrian government for the Klimt landscapes belonging to her family; she offered to let Austria keep the two portraits. Unfortunately, the government did not treat her seriously. In 1999, she sought to sue Austria in that country. The filing fees in Austria, based on the value of the paintings, was prohibitively expensive, and the case was dropped.

The following year, Altmann filed a lawsuit against Austria in federal court in the United States. In 2004, the U.S. Supreme Court ruled that Austria was not immune from such a lawsuit. After this decision, Altmann and Austria agreed to binding arbitration by a panel of three Austrian judges.

Austria’s position was that Adele had made a will bequest, that is, property given by will. Altmann argued that Adele’s will included a request, that is, an act of asking formally for something to happen. To support her assertion, Altmann referred to a section of Adele’s will that stated

In Section III, Paragraphs 2 and 3, the testatrix makes various requests to her husband; he promises to faithfully fulfill said requests, though they do not have the binding nature of a testamentary disposition. It is important to note that the Klimt paintings are not the property of the testatrix, but rather of the testatrix’s widower.”

On January 16, 2006, the arbitration panel ruled that Austria was legally required to return the art to Altmann and the other family heirs.

Portrait of Adele Bloch-Bauer II: A Will BequestThe aftermath

The loss of the paintings was regarded in Austria as a loss of national treasure, and opposition parties criticized the Austrian government for its failure to deal with Altmann in 1998.

The five paintings earned more than $327 million, with The Woman in Gold selling for $135 million to Ronald Lauder for his Neue Galerie in New York City, at the time a record price for a painting. The other portrait (see image at right) sold for $88 million to Oprah Winfrey.

Altmann died in 2011.

The film The Woman in Gold was released in 2015.

Other works relating to the Nazi looting of European artwork

Divorce in Movies: Kramer vs. Kramer

Released in 1979, the movie Kramer vs. Kramer is a cultural benchmark, a snapshot of the fractured American family, and a must-see for anyone interested in family law.

Ted Kramer is a successful guy who is speeding his way to the top at his advertising agency. When the movie begins, Ted has just been handed his agency’s most valued new account, cementing “one of the five best days” of his life.

He is surprised then, when he returns home, that his wife, Joanna, is determined to leave because she doesn’t “know who she is” anymore. She is deserting Ted not only with an entire ad presentation to prepare for the next day but also with their six-year-old son, Billy, to take care of.

Right away we’re close to choosing sides and laying blame: How can she walk out on her home and child? But what we’ve already seen of Ted makes it fairly clear why she might have decided to walk out. She may be leaving the family, but he’s hardly been a part of it. Harassed, running late, and taking his son to school on the first day after his wife has left, he asks Billy: “What grade are you in?” Answer: first. Ted didn’t know.

Over the next 18 months, we see Ted and Billy settle into a routine, but Ted’s work is suffering because of home stresses. When Joanna returns, having found a new well-paying career and a therapist, and demands custody of her son, they enter into the brutal court battle that gives the film its title. As their respective attorneys sink to surprising lows to fight their custody case, Ted and Joanna are shocked with their lawyers’ brutality with the other.

Although our sympathies do tend to be with the father—mainly because we have watched him change—we are basically just acting as witnesses to the drama. The movie has encouraged us to realize that these people are deep enough and complex enough, as all real people are, that we can’t assign moral labels to them.

I won’t tell you the ending, because I don’t want to spoil the film for you if you haven’t see it. I would like to share a few insights into two cultural and legal issues about divorce at that time.

Divorce in Film: the Hays Code

The Motion Picture Production Code, commonly known at the Hays Code, was a set of film industry moral guidelines that was applied to most U.S. films from 1930 to 1968. Under the Code, divorce was rarely, if ever, portrayed on screen because “sanctity of the institution of marriage and the home shall be upheld.”  If divorce was portrayed, it must be only for sound reasons, as a last resort, and never lightly or flippantly. As a result, films during the Code years used annulment, had happy endings where couples got back together, and had bad marriages ending in death (if by murder, then the murderer was always punished under the Code’s “compensating values” rule).

Today, there is no Hays Code. Instead, since in 1968, movies are rated under the following system: G for general audiences, M for mature content, R for restricted (under 17 not admitted without an adult), and NC-17 (originally X) for sexually explicit content.

Kramer vs. Kramer was one of the first major movies to depict realist divorce after the Hays Code.

The “Tender Years” doctrine

Ted Kramer First Meets With His Attorney
Ted Kramer: I don’t know the legal jargon for it, but I think it’s “desertion.” I don’t mean to tell you your job, but I think I have an open-and-shut case.
John Shaunessy: Well, at first Mr. Kramer, there’s no such thing as an open-and- shut case where custody is involved. I’ll bet your ex-wife has already found a lawyer who’s advised her to move back to establish residency. The burden is on us to prove that your ex-wife is an unfit mother. That means I’ll have to play rough. If I play rough, you can bet they will too. Can you take that?

Until the 19th century, English family law gave custody of the children to the father after a divorce, mainly because women had few individual rights and obligations. In 1839, the Custody of Infants Act gave some discretion to the judge in a child custody case and established a presumption of maternal custody for children under the age of 7 years with financial support from the fathers. In 1873, Parliament extended the presumption of maternal custody until a child reached 16. Fathers could only gain custody if they could prove that the mother was unfit.

In the United States, the tender years doctrine was gradually replaced toward the end of the 20th century. Legislation of most states now advocates the seemingly gender-neutral “best interests of the child” doctrine of custody. That said, some judges still firmly believe young children belong with their mothers.

Long-time New York attorney Raoul Felder about divorce law after the movie. “Suddenly I had fathers in my office asking for custody of their children,” he said. “Kramer vs. Kramer challenged the long-held notion that mothers should automatically be awarded full custody of their children. The film marked the beginning of the standard that’s become commonplace today, that the court places the child’s best interest over the presumption that mothers are automatically deserving of custody.”

No-fault divorce: What is it?

A Texas state representative has again submitted a bill in the 2017 legislative session that would strike “insupportability,” or “no fault,” as grounds for divorce. Under the bill, because a no-fault divorce would not be available, a couple who wants to dissolve their marriage peacefully will have to live separately for 3 years before filing for divorce. This bill has been submitted before but has never made it to a vote in the state legislature.

Causes for Texas Fault-Based Divorces
Felony conviction & imprisonment ≥1 yr
Abandonment ≥1 yr
Living apart ≥3 yr
Spouse in mental hospital ≥3 yr
(TX Fam Code § 6.001-6.007)

History of no-fault divorce

In a no-fault divorce, a family court can grant a divorce without requiring a showing of wrongdoing by either party.

California was the first state to pass a no-fault divorce law, which was signed by Governor Ronald Reagan and came into effect in 1970. Perhaps Reagan was inclined to sign the law because his first wife, Jane Wyman, had unfairly accused him of “mental cruelty” to obtain a divorce about 20 years earlier. By 1985, every state but one had adopted some form of no-fault divorce. The remaining state, New York, passed its no-fault divorce law in 2010.

What parties did before no-fault divorce

Before laws allowing no-fault divorce, spouses who wished to get divorced had to create legal fictions to bypass the statutory requirements. Three main methods were used:

  1. “Forum shopping”—One spouse would move to a state where no-fault divorce was available, stay there long enough to become a resident, and then file for divorce there.
  2. “Collusive adultery”—Both sides deliberately agreed that the husband would be discovered committing adultery with a “mistress” obtained for the occasion. The judge would convict the husband of adultery, and the couple could be divorced.
  3. “Cruelty”—Wives would regularly testify that their husbands swore at them, hit them, and generally treated them terribly.

Reno Divorce: A forum shopping example

Reno_divorce_3Many have heard of a “Reno divorce.” By 1909, Reno had earned the title of “divorce headquarters” because it required only a 6-month residency. Over the next 20 years, Nevada keep decreasing its residency requirement until in 1931, to help secure the state’s economic health through the Great Depression, it dropped the requirement to a mere 6 weeks.

Another advantage of divorcing in Nevada was the ability to immediately marry someone else without a waiting period.

Wallis Simpson: A collusive adultery example

A well-known version of “collusive adultery” is the story of how Wallis Simpson got her divorce from her husband Ernest so she could marry Edward VIII, then the King of England and later the Duke of Windsor.

In 1936, both the Anglican Church and English law only recognized adultery as a legitimate ground for divorce. Ernest was “discovered” in a hotel bedroom with a recruited friend of Wallis. Ernest gave the friend the nickname Mrs. Buttercup Kennedy to protect her identity.

Wallis Simpson in 1936

Wallis Simpson in 1936

Wallis then filed for divorce on the grounds that Ernest had committed adultery. She was granted a decree nisi, which meant that if no party objected to the divorce it would be granted in 6 months. This compulsory waiting period was mandated because English law refused to accept divorce by agreement. There were other possible difficulties as well in this particular case: Only an “innocent” spouse was entitled to divorce, and some people suspected that Wallis had been the King’s mistress, or at any rate that she had had several other lovers.

Wallis left England and did not see Edward VIII during the 6-month waiting period in an attempt to prevent further investigation. After the 6 months, the divorce was granted, Edward VIII abdicated, and Wallis became the Duchess of Windsor.