It doesn’t happen often, but it happens occasionally. Someone in a deceased homeowner’s family was missing or unknown. Maybe that someone had a potential interest in the home.
So here’s the question. What if a relative decides to make a claim, perhaps years after a home has changed hands?
Sure, anyone can claim anything. No way could that person succeed, right? It all depends on the law of the state, and the facts of a case.
How Would Heirs Go Missing in the First Place?
Heirs are people who have legal claims to property of the deceased. Their identity or whereabouts could be unknown for a number of reasons. This could most easily happen with a home sold by a deceased person’s estate. Consider an estate that sells off the home, but never knew the wishes of the person who died, as no will was found.
☛ If a home’s owner dies without a will, the court distributes the real estate to relatives, in the order laid out in state intestacy laws.
Or the prior (deceased) owner might have distant relatives who simply weren’t all accounted for during probate. Sometime after probate, the relatives learn of the conveyance, and might believe they had a legal interest in the home. Surviving children who were left out of the will might contest it when they learn of it later.
Or someone could discover a new will, different from the probated will.
Technology brings increasing numbers of heirs to light who’d otherwise be untraceable. Genealogy platforms and DNA testing services are easily accessible. Some people go to these platforms to trace their biological relatives. Some learn that they have estranged siblings, or that they were adopted. It’s entirely possible for heir tracing or DNA tracing to lead to disputes about family wealth. It is, therefore, entirely possible for technology to bring claims to the surface that were bypassed by the local courts administering people’s estates.
Manipulation or a fraudulent claim could even be part of the picture. For example, consider the opportunist who forges real estate documents, making it appear as though the deceased person gave up real estate ownership interests before dying.
☛ Deed forgery is common. And where a prior occupant was deceased when the deed changed hands, opportunities for fraud can reach a high level.
When missing heirs turn up, the current homeowner probably learns of these claims from the past on a lawyer’s letterhead. It’s the kind of surprise nobody expects to get.
Owner’s Title Policy to the Rescue?
Missing heirs make up a little-known reason to get an owner’s title insurance policy when acquiring real estate. If receiving property through a probate court, the new homeowner works with a title insurance expert to be sure there is coverage for cases of missing heirs.
Title insurance has to be purchased when the property is acquired, and one single payment means the buyer is covered for good. (Note: An owner’s title insurance policy is not the same as the title policy that covers a mortgage lender. These are separate policies with different beneficiaries.)
An owner’s title insurance policy is designed to defend the property rights deeded to the name of the policy holder.
☛ Did you know? Some real estate agencies have experience with estate sales. Their agents support buyers through closings under the probate court’s supervision. These agents might focus on vacant properties hitting the market — often because the prior homeowners have died.
Most people — more than two-thirds in the United States — die without leaving a will to guide the distribution of their valuables after they’re gone. When people die intestate (which means leaving no will), the probate court posts a public notice as directed by state intestacy law. The point of the publication is to try to alert creditors, and any possible heirs.
Then the probate court-appointed administrator goes through the sequence of finding and notifying specific relatives. The state’s law sets forth the order of contacts: spouse, offspring, parents… And so on down the line.
Once it identifies a legally eligible heir, the court transfers the title to that party, using an administrator’s deed. Is that transfer final? Check state law to learn how the state treats real estate in these circumstances. The law might hold that people who turn up later with their claims cannot challenge the title transfer.
☛ Time is of the essence when a probate court administers an estate. Check the law of the state where the property exists. The state’s law controls the timeline for estate administration after a homeowner dies. It sets forth the span of time available to heirs, or others with viable claims on the real estate, to act.
If no one turns up who could inherit it, then the state takes title to the real estate. In legal terminology, the state now owns the real estate by escheat. At this point the state identifies liens and judgements on the home — any obligations tied to the home that bound the now-deceased owner. The state typically compensates all outstanding claims by parties with secured interests in the property.
Next, the state might then sell the home, or dedicate it to a public use.
But that’s a rare case. Today’s probate courts have computers to help them trace potential heirs. An estate administrator could hire professional heir tracers to carry out the task. To avert fraud or unfair dealing, though, the probate court might have rules directing administrators to use services that charge pre-determined fees for their work.
Here again, errors do occur. An owner’s title policy covers the new deed holder from missing heirs or other parties who could pursue claims that fell though the cracks. The insurance policy covers legal costs for clearing the claims from the title. Without insurance, the innocent buyer would likely have to satisfy the party making the claim, or deal with the expenses of a quiet title action.
Protection From Missing Heirs, In a Nutshell
Missing heirs don’t appear out of the blue often. But when they do, they could question a home buyer’s real estate title.
The buyer’s best course of action? Anyone accepting a deed (or a professional acting on their behalf, such as a mortgage consultant) should consult with the title company. One element to know about? Protection from unknown heirs. Before closing, and ask about the relevance of extended title insurance to the specific risks of any property.
And remember, laws can change. A local real estate lawyer can offer guidance under the current provisions.
Supporting References
Deeds.com: Escheat Homes and the Bizarre Business of Heir-Tracing (Feb. 17, 2021).
Deeds.com: Home Buyers, Cover Your Assets: Choosing Between Standard and Extended Title Insurance (Dec. 11, 2020).
California Court of Appeal: McGuigan v. City of San Diego, D055199 (Apr. 6, 2010).
Mazzoni Valvano Szewczyk & Karam: What Happens When Missing Heirs Claim Ownership of Your Property? (Mar. 12, 2019).
Absolute Trust Counsel (California estate law): Why Your Estate Plan Needs to Provide for Unknown Heirs.
First Centennial Title Company of Nevada: Undisclosed and Missing Heirs: Another Reason for Title Insurance (undated flyer in PDF format).
And as linked.