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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
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Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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My father passed away September 2012. He had Promissory Note

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My father passed away September 2012. He had Promissory Note that he inherited from my Uncle (who passed away in 2010) Everything is still in my Uncle's name. Me, my brother, and my sister inherited the note. We each receive $500 a month which is collected and processed through an escrow company and then the checks are deposited in each of our accounts by the escrow company. The property and escrow company are in El Paso, Texas. I, along with my brother and the executor from my uncle's estate received Assignment of Note and Liens to sign so the note can be transferred to me, brother and sister. I met with an attorney here in Prescott, AZ to have the document reviewed prior to signing. The attorney told me the following should be included in the note:
1. It needs to specify that each of us have 1/3 interest in the property
2. It needs to specify that if we choose at a later date, we can use a different escrow company
The attorney told me I could handle advising the personal rep (my sister) and the atty she is working with by sending an email with the information.

I sent the email and I received the following response:

1. It needs to state that each of us have exactly 1/3 interest in the note
Answer I received:
"Reference Attachment1_RequestToDivideEscrowAccountToBeneficiaries -
The account was divided equally (1/3) to each of us. The monthly statement from the Escrow reflects the total in each of our accounts."

2. Something needs to be in there that if we ever decide not to use Mills Escrow that we have the option of moving it to another escrow company
Answer I received
"We always have the option of moving the note."

My question is:

Is the escrow company dividing the account three ways sufficient even though the assignment doesn't specify each of our interests?

Is it assumed in Texas the people listed in the document each have an exact interest?

Also, in the answer I received I am being pushed to sign the document ASAP and get it returned.

Thank you,
Thank you for your question. I look forward to working with you to provide you the information you are seeking.

The fact that the payments are divided into 3 separate accounts is sufficient, even though the AZ attorney's suggestion was additional protection in the event of a dispute. However, in Texas unless the will or testament states otherwise, such inheritance is automatically divided by law in equal shares, so you have statutory protection and what the AZ attorney suggested is just stating what the Texas law states. I do not understand though why the Texas attorney would object to including this clause as it really does not change anything and you need to respond to the Texas attorney that you would be more comfortable if that statement were included in the agreement and since he is saying it is already that way, the clause should not be any problem to include for him.

As far as the escrow company, you need to ask the attorney in Texas to show you the documents showing that there is no agreement binding you to this one escrow company. If there is nothing that states this escrow company is the sole company and/or has exclusive rights, the Texas attorney is correct in that the company can be changed at any time. Again, if what the attorney in Texas is telling you, even though this clause is not necessary, it changes nothing and hurts nothing for him to include it and you need to tell him that in your response as well.

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