The Role Of Title Insurance In Estate Planning

If you’re leaving real property in your will or otherwise leaving it to others in some other way when you’re gone, you want your beneficiaries to have what you’re leaving to them, free and clear of liens or encumbrances of any kind.

You normally don’t worry about this when you buy property, because presumably, you hopefully would have done a title search before purchase. But your loved ones don’t get that benefit—they aren’t having a closing—they’re just inheriting the property the way that you leave it to them.

That means that if you don’t already have it, title insurance for any property that you are leaving in your estate documents, is crucial, to allow others to legally inherit the real property that you are leaving to them.

Why So Important?

This is true, regardless of what your beneficiaries want to do with the property.

Without demonstration of clear title and insurability, they won’t be able to sell inherited property, at least, not for anything close to full value. If there is a serious title problem on property, your loved ones may not be able to ever sell it without costly litigation to clear title.

If your loved ones want to keep the property, they also don’t want the risk of someone suing them, claiming ownership of the property that you have left to them.

Co-Ownership

Title searches also reveal other issues that could affect your estate planning—namely, the type of ownership someone has over property.

If you (or a previous owner of the property) owned the property as tenants in common, or joint tenants, or as part of a life estate, or in any other of the number of ways that property can be held when there is joint ownership, you will need to make sure that title has passed to you legally, for you to leave it to someone else.

And if you own the property as a co-owner, in one of the many types of forms of co-ownership, you may need to take other co-owners off the title, in order for you to leave it to someone else.

Remember you can only leave to others what you legally own. So if you are just a part or co-owner of real property with someone else, and you pass, you can only leave your share of interest in that property to anybody else.

If that’s not what you want or intend, you may need to see an attorney now, to work out some way (or make a deal with the co-owner), to make sure you own the property on your own.

Violations and Fines

If you have owned property for a long time, and made modifications to it, the property may no longer be up to code. A public records search can also reveal whether the property is subject to city or local fines for code violations.

Leave the real estate to others in your estate plan the correct way. Call the Torrance probate will and estate attorneys at Samuel Ford Law today.

Source:

aaepa.com/2017/04/basics-estate-planning-know-funding-real-estate-trust-part-1-4/