Legal Question in Real Estate Law in Maryland
In 2008 the owner(1st person) of Property had a Deed written up by a Lawyer to add a 2nd Person to the Deed. It states the 2nd person will take ownership of the property upon the death of the 1st person. The 1st & 2nd person are not related, & at no time were they married or otherwise involved.
In 2009, the 1st person refinanced the property to consolidate his bills & a new Deed of Trust was written & included the 2nd person. At the request of Bank the 2nd person signed a temporary Power of Attorney for Refinance, written to expire 2 months after the refinance was complete & the 1st person signed the new Deed of Trust for the 2nd person when the refinance was complete.
The 2009 Deed of Trust does not mention that the 2nd person will take ownership of the property upon the death of the 1st person, but the 1st & 2nd person are named on the 2009 Deed of Trust as the Grantors & both live on the property & only the 1st person is named on the loan.
Is the 2008 Deed considered a Life Estate Deed? Does the 2008 Deed Expire? Does the new 2009 Deed of Trust override the 2008 Deed? If the 1st person wished to sell the property would the 2nd person be required to sign a release before the sale of property?
1 Answer from Attorneys
The 2008 deed conveyed a life estate to #1 with the remainder to #2. However, it probably allowed #1 to retain full control over the property, including power to sell or refinance. A real estate attorney would have to review it to see what its exact terms are. If it does contain a power of sale, #1 could sell it without #2's consent.
The 2009 refinance had nothing to do with the '08 deed, nor did it change the ownership status. However, it further encumbered the property so there is now less equity in it than before. Deeds do not "expire"--they stay in effect until a new deed executed by the owners is written. Do not confuse a deed with a deed of trust. The former indicates who owns the property. A deed of trust merely conveys a security interest in it to a lender--popularly known as a mortgage.
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