Douglas B Price, Esq.
What to Do with A Mobile Home in Probate
Many Arizona Senior Citizens (and part-year residents), living in Tempe, Mesa, Apache Junction, or the East Valley own Mobile Homes. Generally, these can be placed into two categories:
- Those mobile homes which are Affixed to Land so that both the land and the mobile home are owned together.
- Those mobile homes on rented land in which the mobile home is owned, but the owner must pay monthly rent for the land and/or utility service.
I MOBILE HOMES AFFIXED TO THE LAND
Those mobile homes affixed to the land are part of the land. An Affidavit of Affixture has been recorded showing that the mobile home is attached to the land and is part of the land that is owned. If the equity is less than $100,000.00, it may be possible to save probate expenses by a document that substitutes for probate. However, the value of the land and mobile home are COMBINED and, due to the high value of Arizona land, the combined value is often in excess of $100,000.00. If the property exceeds $100,000.00 in equity the property cannot be transferred by substitute probate. If there is not a joint tenancy deed, a probate must be filed unless there is a Trust. Further, if the owner has failed to prepare a will or trust, Arizona law requires distribution according to Arizona law, which may not be what the family desires. For example, children of prior marriages have property rights which the current family may not agree with. However, the estate administrator is duty sworn to follow the law, whether or not the estate administrator agrees with it. This illustrates one situation (of many) where estate planning can save a lot of future trouble and expense. The lesson is to do your estate plan when you are of sound mind and prior to your death. Our office specializes in the expert preparation of estate plans and we invite you to contact us by phone, text, or via our website.
II MOBILE HOMES ON RENTED LAND (as in a mobile home park)
When a mobile home is on rented land, it will be treated as a motor vehicle under Arizona law and will have a “vehicle” title. In the case of a double-wide there will actually be two titles, one for each half. The value of the mobile home by itself is usually quite a bit less than $75,000.00 (the upper limit for the transfer of personal property without probate). Many mobile home parks are located in Mesa, Arizona, Tempe, Arizona and Apache Junction, Arizona. Both Maricopa and Pinal Counties have a number of mobile home parks. A will or trust, however, will be very helpful in helping the beneficiaries to rent, sell or move the mobile home before the value is consumed by monthly lot fees and/or utility fees.
Since the owner of the mobile home does not own the land, the owner cannot give the land to anyone, including the owner’s beneficiaries. It is worth noting that, due to the low value of the mobile home, and due to its depreciation in value, the mobile home will not be a valuable asset for a beneficiary. Indeed, the beneficiary may consider it to be more of a headache. It is not unusual for a beneficiary to turn over the title to the landlord (often a mobile home park) in exchange for back rent and utility bills that have accrued against the mobile home. If you have questions regarding a mobile home situation we can advise you of the best course of action when you contact our office.
III. REVERSE MORTGAGES:
If the owner of the mobile home on owned land has qualified for a reverse mortgage (HECM), it will need to be re-paid, usually within 12 months of moving out or upon the event of death. Until that time, the owner has only the payment obligations of paying the taxes and property insurance on the land. By eliminating the traditional mortgage payment, and freeing cash to pay other bills, or providing a line of credit, the owner may greatly benefit from having a reverse mortgage. The sale after death often will generate proceeds in excess of the mortgage so the beneficiary will obtain a windfall after paying back the reverse mortgage and paying the expenses of sale.
It is unlikely that the owner of a mobile home on rented land will even qualify for a reverse mortgage, so will not be an issue. We work with reverse mortgage lenders from a planning standpoint as well as in probate and trust administration cases. If you have questions regarding a reverse mortgage you may contact our office via phone, text or our website.