UNPROBATED ESTATES DECEASED SOLE OWNERS AND TENANTS IN COMMON

Transcription

1 UNPROBATED ESTATES DECEASED SOLE OWNERS AND TENANTS IN COMMON Often we are asked to insure title without going through probate after the record owner or co-owner has died. Keep in mind that while we are willing to insure without probate, we must be certain to identify all heirs and legatees who could have an interest and obtains deeds from all of them. When dealing with small estates where the decedent died intestate, or where the legatees are the same persons as the heirs, this is a simple and fairly risk free process. PARTY IN TITLE: If the names of the heirs have not yet been disclosed: HEIRS AT LAW OR LEGATEES OF, DECEASED SCHEDULE B: Raise the following: It is not necessary to put the heirs or legatees in title on Schedule A of the commitment. RELATIVE TO THE DEATH OF ~, WE SHOULD BE FURNISHED THE FOLLOWING, AND THIS COMMITMENT IS SUBJECT TO SUCH FURTHER EXCEPTIONS AS THEN MAY BE DEEMED NECESSARY, INCLUDING, BUT NOT LIMITED TO, POSSIBLE CLAIMS AGAINST THE ESTATE OF SAID DECEDENT AND POSSIBLE ESTATE TAXES: 1. A CERTIFIED OR UNCERTIFIED COPY OF THE DECEDENT S DEATH CERTIFICATE; 2. AN AFFIDAVIT OF HEIRSHIP; 3. EVIDENCE OF THE VALUE OF THE ESTATE FOR FEDERAL ESTATE TAX PURPOSES; AND 4. A COPY OF THE WILL AND ANY CODICILS, IF THE DECEDENT DIED TESTATE. IN THE EVENT THAT THE DECEDENT DIED WITHIN THE LAST TWO YEARS AND INSURANCE OVER CLAIMS AGAINST THE ESTATE IS DESIRED, SUCH COVERAGE MAY BE OBTAINED BY THE COMPLETION 1

2 OF A PERSONAL UNDERTAKING, A STATEMENT OF INFORMATION AND THE PAYMENT OF AN ADDITIONAL PREMIUM. ~ CLEARANCE: Note: When reviewing the death certificate, verify the identity of the deceased party, the date of death, information on the decedent s marital status/heirship and the cause of death. If the decedent died from other than natural causes, consult with an underwriter of the company. If deemed appropriate, an exception such as the following may need to be raised: THE QUESTION OF THE COMPANY S WILLINGNESS TO INSURE TITLE COMING THROUGH THE ESTATE OF ~, DECEASED, SHOULD BE SUBMITTED TO AN UNDERWRITER AND THIS COMMITMENT IS SUBJECT TO SUCH FURTHER EXCEPTIONS AS THEN MAY BE DEEMED NECESSARY. [DEATH CERTIFICATE DISCLOSES CAUSE OF DEATH WAS A GUN SHOT WOUND] Upon receiving evidence of the decedent's date of death: If the decedent died more than two years previously, amend Schedule B to delete the references to possible claims against the estate. If the decedent died within the last two years, amend the language of the exception accordingly: CLAIMS AGAINST THE ESTATE OF SAID DECEDENT. ~ NOTE: THE CLAIMS PERIOD IS TWO YEARS FROM THE DATE OF DEATH, 755 ILCS 5/18-12(B). IF WAIVING PRIOR TO THE EXPIRATION OF THIS LIMITATIONS PERIOD, THE FOLLOWING IS REQUIRED: 1) A NON-REFUNDABLE 1% OR 2% ADDITIONAL RISK PREMIUM; 2) A PERSONAL UNDERTAKING. Note: The elements of a proper affidavit of heirship are detailed on page 5 of this chapter. An underwriter of the company should be consulted if elements are omitted, conclusory or ambiguous. If deemed appropriate, an exception such as the following may need to be raised: THE AFFIDAVIT OF HEIRSHIP SUBMITTED WITH RESPECT TO ~, DECEASED, MAY BE INSUFFICIENT FOR INSURANCE PURPOSES IN THAT: (A) IT IS NOT SIGNED, SWORN OR NOTARIZED; (B) IT DOES NOT STATE WHETHER THE DECEDENT ADOPTED ANY CHILDREN; (C) IT DOES NOT STATE WHETHER THE MARRIAGE TO ~ WAS DISSOLVED BY DIVORCE OR BY THE DEATH OF SAID SPOUSE; (D) IT DOES NOT STATE WHETHER ~, THE PREDECEASED CHILD OF THE DECEDENT, DIED WITH ANY CHILDREN BEING BORN TO HIM OR HER. (E) IT DOES NOT ADDRESS THE ISSUE OF POSSIBLE ILLEGITIMATE CHILDREN. THE AFFIDAVIT OF HEIRSHIP SHOULD BE CORRECTED, RE-EXECUTED AND RE- ACKNOWLEDGED OR A SUPPLEMENTAL AFFIDAVIT SHOULD BE SUBMITTED, AND THIS COMMITMENT IS SUBJECT TO SUCH FURTHER EXCEPTIONS AS THEN MAY BE DEEMED NECESSARY. 2

3 If the affiant claims to be the sole heir and a corroborative affidavit has not been submitted, you may need to raise an exception such as the following: SINCE THE AFFIANT OF THE AFFIDAVIT OF HEIRSHIP SUBMITTED WITH RESPECT TO ~, DECEASED, APPEARS TO BE THE SOLE HEIR, A CORROBORATIVE AFFIDAVIT SHOULD BE SUBMITTED AND THIS COMMITMENT IS SUBJECT TO SUCH FURTHER EXCEPTIONS AS THEN MAY BE DEEMED NECESSARY. Upon receiving evidence of the value of the estate, amend SCHEDULE B accordingly and, if the gross estate exceeds the amount shown in the chart below, raise the following: FEDERAL ESTATE TAX, ILLINOIS ESTATE TAX AND ILLINOIS GENERATION- SKIPPING TRANSFER TAX, IF ANY, WHICH MAY BE IMPOSED AGAINST THE ESTATE OF SAID DECEDENT. ~ In addition contact an underwriter of company. Probate would typically be required for any estate large enough to incur estate tax. The amount of the unified credit is the familiar increasing exclusion amount. For decedents dying during Exclusion Amount 1998 $625, $650, and 2001 $675, and 2003 $1,000, and 2005 $1,500, ,2007 and 2008 $2,000, $3,500,000 If the decedent died testate, the will, together with codicils, if any, must be examined in order to determine the rights and interests which may be conferred in the event the will is admitted to probate. Keep in mind that there is no statute of limitations for the probating of a will. After reviewing the will, raise the following exceptions, as appropriate: (if the will devises the real estate - either specifically or through the residuary clause - to people or in fractional shares which differ from the provisions of the intestacy laws): RIGHT, TITLE AND INTEREST OF ~, THE LEGATEE(S) UNDER THE UNPROVEN WILL OF SAID DECEDENT. ~ (if the will specifically provides the amount of a legacy be a lien or charge against all or some of the decedent s real estate): 3

4 LEGACY BEQUEATHED TO ~ IN THE AMOUNT OF $~, CHARGED AGAINST THE REAL ESTATE BY THE TERMS OF THE UNPROVEN WILL OF SAID DECEDENT. ~ (if the will is a joint and mutual will): RIGHT, TITLE AND INTEREST OF ~, AS ULTIMATE BENEFICIARY(IES) UNDER THE UNPROVEN JOINT AND MUTUAL WILL OF SAID DECEDENT. ~ Always contact an underwriter of the company whenever you run across a joint and mutual will. NAME SEARCH: The decedent (do not cut-off the decedent; however, as to matters which arose after the decedent s death, focus only on those which affect the estate); The heirs of the decedent (complete name search); and If testate, those legatees who would receive an interest in the real estate if the will were admitted to probate (complete name search). Raise judgments and liens found against all heirs or legatees of the decedent. REQUIREMENTS: Warranty deeds from all heirs and legatees of the decedent. If the decedent died testate but the will has not been admitted to probate, it is critical to obtain warranty deeds from the legatees under the will. Since the will is not effective until admitted to probate, a quit-claim deed would convey only what interest they have at the date of execution, which is none. A warranty deed is required so that the doctrine of after acquired title works in favor of the grantee in the event the will is admitted to probate at some later date. Personal Undertaking or Indemnification from as many, if not all, of the heirs and legatees of the decedent. This indemnification covers us not only for claims against the estate, but also from the consequences of an estate subsequently being opened. THIS PROCESS SHOULD NOT BE UNDERTAKEN WHEN THERE IS ANYTHING UNUSUAL ABOUT THE ESTATE OR LAND, OR IF THERE IS ANY KNOWLEDGE OF CONFLICT WITHIN THE DECEDENT S FAMILY. 4

5 THE ELEMENTS OF A PROPER AFFIDAVIT OF HEIRSHIP The affiant must be a person who is in a position to know the facts, such as a close relative or close acquaintance. The affidavit must contain the following information. It must not merely state conclusions: The date of the decedent s death; A recital that the decedent was the owner of the land on the date of death; The value of the decedent s estate for federal estate tax purposes; Whether the decedent died testate or intestate. If the decedent died testate, a copy of the will and all codicils also should be furnished; The number of times the decedent was married, the name of each spouse and the reason for the termination of each marriage; or a statement that the decedent was never married; The number of children born of each marriage, with the name, age and marital status of each such child; A positive statement that only the children listed (or that no children) were born of each such marriage; A positive statement that only the children listed (or that no children) were born to the deceased; NOTE: In the event a child or other descendant died prior to the decedent s death, the date of said party s death and information necessary to determine the identity of those persons in whom the deceased child s descendant s share is now vested must be provided. NOTE: If a spouse, child or other heir died after the decedent s death, that heir s share will pass through the heir s estate. As a result, the heir s estate also will need to be examined in order to determine the devolution of that share. If such heir s estate is not being probated, a separate table of heirship should be provided. A positive statement relative to any adoptions by the decedent; and In the event the decedent left no descendants or surviving spouse, the affidavit must affirmatively so state before listing ancestors or collaterals. The affidavit must be signed, sworn to and notarized. The affiant s address should appear on the instrument. If the affiant claims to be the sole heir, a corroborative affidavit by a disinterested party also should be furnished. 5

6 AFFIDAVIT OF HEIRSHIP OF State of ) County of ) SS., of lawful age, being first duly sworn, upon his/her oath deposes and says: That he/she was personally well acquainted with (hereinafter referred to as decedent) during his/her lifetime, having known him/her for years, and that affiant bears the following relationship to said decedent, to-wit:. Affiant further states that the said decedent departed this life at, in the County of, State of, on or about, 19 (attach copy of death certificate). Affiant further states that he/she was acquainted with the family and relatives of the said decedent, and the value and nature of the property owned by the decedent, and the value and nature of the property owned by the decedent at the time of his/her death. The following statements and answers to the following questions are based upon the personal knowledge of affiant and are true and correct: 1. (a) Was an estate ever opened for said decedent in a court of law? (b) If so, when, where and what was the case number? 2.Did the decedent leave a will? (attach copy, if any) 3.Give the name of any spouse of the decedent who lived longer than the decedent: 4.Give the approximate date that any surviving spouse later died: 5. List the names of all children of the decedent. Include all children by any marriage, illegitimate children and adopted children. 6

7 6. (a) Give the names of any children listed at 5 (above) who died before the decedent: Name Date of Death (b) Give the names of the children of any children listed at 6 (a): Name if now deceased Date of Death Parents 7. If there were no descendants (children, grandchildren, etc.) of the decedent living at the time of his/her death, then list the names of the father, mother, brothers and sisters of the decedent, and, if applicable, the dates of their deaths. now Date of Death Name Relationship if deceased 7

8 Affiant further states that all debts of the decedent, including the funeral and burial expenses and any final medical bills, have been paid in full, and that the value of all property owned by the decedent at the time of his/her death did not exceed $. Signature of Affiant Address of Affiant Telephone (Days) (Evenings) Subscribed and sworn to before me this day of, 20. Notary Public Note: Please attach a copy of the death certificate of the decedent and a copy of his/her will, if any. COMMITMENT POLICY OR FILE NUMBER: CHICAGO TITLE INSURANCE COMPANY PERSONAL UNDERTAKING -- ALL ESTATES 8

9 In consideration of the issuance of your Title Insurance Policy the undersigned do hereby, jointly and severally, for themselves, their heirs, personal representatives and assigns, covenant and agree forever to fully indemnify, protect, defend and save you harmless from and to reimburse you for any and all loss, costs, damages, suits, attorney's fees and expenses of every kind and nature which you may for any cause, at any time and from time to time, suffer, expend or incur by reason or in consequence of the issuance of said policy, and of any and every other insurance policy or policies covering the same real estate, or any part or parts thereof, or interest herein free and clear of the following objections: 1. Claims (including awards, if any) against the Estate of, deceased. 2. State Estate and Federal Estate Tax which may be charged against the estate of the decedent. 3. Legacies created by the will of the decedent, if any. 4. Right to contribution, if any. 5. Rights of the executor, if & when appointed. Date: Name Address Name Address Name Address 9