- September 26, 2008
- All Issuing Offices
- U.S. Judgment Liens; Federal Tax Liens: Tenancies by Entireties and Marital Rights
This bulletin provides updated Company-policy information regarding the above-referenced topic. The United States Supreme Court, in United States v. Craft, 535 U.S. 274 (April 17, 2002), has ruled that a federal tax lien against one spouse will attach to that spouse's rights in property held as tenants by the entireties.
The Supreme Court considered Michigan law. Michigan law, like several states that have tenancy by the entireties, does not recognize attachment of a judgment lien to land held as tenants by entireties, if the judgment is only against one spouse. The court ruled that state law will not apply and that the federal tax lien will attach. Subsequent case law indicates that the implications of Craft may be extended to other types of federal judgment liens. See 18 U.S.C. § 3613(c); United States v. Godwin, 446 F. Supp. 2d 425, 427 (E.D.N.C. 2006) (holding that a restitution order is a lien in favor of the United States as if the liability of the person fined were a liability for a tax).
If you are insuring on a current conveyance or mortgage by spouses who hold title as tenants by the entireties, joint tenants, cotenants with right of survivorship, or homestead, you must require a release or satisfaction or discharge of any outstanding federal tax lien or U.S. judgment lien against either spouse.
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THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.
- Bulletins Replaced:
- NL000123 This Bulletin has been replaced by SLS2008017.
- Related Bulletins:
- Underwriting Manual:
- 6.08.3 Property Subject To The Lien Of A Federal Tax
- 19.08.7 Federal Tax Liens And Tenancies By The Entireties
- Exceptions Manual: