Bulletin: VA2019001

Date:
March 25, 2019
To:
All Virginia Issuing Offices
RE:
UNDERWRITING - Program for Insuring the Title of Bona Fide Purchasers & Lenders from the Estates of Decedents within one year of Decedent’s Death [Revised 3-27-19]

Dear Associates:

This Bulletin provides you with guidance on programs available for providing purchasers from decedents’ estates and their lenders with a policy that does not except to such matters. Please refer specific decedents’ estate questions to your local underwriter.

Commitment Requirement for Decedent’s Estate Transfer:

A title insurance commitment for the sale of real estate from a decedent’s estate to a bona fide purchaser [simply defined as a party paying market value for the property and without knowledge of any possible claims against the estate - e.g., not an heir “buying out” the other heirs], must include the appropriate following language:

Intestate Decedent (no will admitted to probate):

The property to be insured is subject to the following exceptions to coverage due to the death of _______________________________ on ________________________________.

(1) possible debts of said decedent or against said decedent’s estate;

(2) possible federal and/or state estate and/or inheritance taxes;

(3) possible discovery and probate of the last will of said decedent.                                                                                  

Such matters shall appear as exceptions in any policy issued hereunder, unless an Indemnity and Escrow Agreement and one of the following are furnished to, reviewed by, and accepted by the Company. The Company reserves the right to make further requirements after review of same. The Company must be provided an Indemnity and Escrow Agreement in the form attached and:

(a) a corporate surety bond covering the net proceeds of the sale, which bond shall run in favor of the Company; or,

(b) a cash escrow of the net proceeds of the sale; or,

(c) payment to the Company of an extra-hazardous premium at the rate of $2.00/$1,000 of the Amount of Coverage stated in Schedule A, with a minimum payment of $250.00.

Testate Decedent (will admitted to probate):

The property to be insured is subject to the following exceptions to coverage due to the death of _______________________________ on _______________________. 

(1) possible debts of said decedent or against said decedent’s estate;

(2) possible federal and/or state estate and/or inheritance taxes;

(3) possible appeal from the order admitting the will of said decedent to probate;

(4) possible suit to impeach the will of said decedent;

(5) possible discovery and probate of a later will of said decedent;

(6) possible augmented estate interest.

Such matters shall appear as exceptions in any policy issued hereunder, unless an Indemnity and Escrow Agreement and one of the following are furnished to, reviewed by, and accepted by the Company. The Company reserves the right to make further requirements after review of same. The Company must be provided an Indemnity and Escrow Agreement in the form attached and:

(a) a corporate surety bond in the amount of the net proceeds of the sale, which bond shall run in favor of the Company; or,

(b) a cash escrow of the net proceeds of the sale; or,

(c) payment to the Company of an extra-hazardous premium at the rate of $2.00/$1,000 of the Amount of Coverage stated in Schedule A, with a minimum payment of $250.00.

Procedures to follow to clear the title objection(s):

1. Obtain the appropriate Indemnity Form executed by the heirs and personal representative(s) of the estate. Intestate and testate forms are attached.

AND

2. Obtain corporate surety bond and submit for review. Where an amount is to be inserted in the Indemnity and Escrow Agreement, write in "Bond". The bond premium is paid to the surety. With this described bond there is no additional premium to Stewart.  

OR

3. Retain the net proceeds, AFTER inquiring prior to settlement with your local Stewart Title underwriting office about the disposition of sales proceeds. Title agents are not permitted to hold estate escrows on behalf of Stewart when they issue a policy that insures against defects in the title to an estate without permission of underwriting counsel. Please check with the local office to determine if there is an escrow fee for that service. Enter the amount of the net proceeds where indicated on the Indemnity and Escrow Agreement.

OR

4. Collect the extra-hazardous premium and remit same immediately after closing to your local Stewart underwriter, together with the original Indemnity and Escrow Agreement and a copy of your title policy.

5. To emphasize: Contact your local STG underwriter if you are aware of any controversy or interested parties objecting to the proposed transaction, and/or questions about:

  • Pretermitted heirs (heirs born after the will was executed), per Code of Virginia Section 64.2-419. 
  • Heirs or a spouse not receiving shares.

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.

Decedent Estate Indemnity and Escrow Agreement TESTATE Revised March 2019
Decedent Estate Indemnity and Escrow Agreement INTESTATE Revised March 2019
Decedent Estate Indemnity Intestate Revised March 2019
Decedent Estate Indemnity Agreement Testate Revised March 2019

 

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.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None