The Uncertainty of Death

When we receive title search results from our title underwriter for property that is owned by someone who is deceased, we are always somewhat surprised to see the requirements imposed for the clearing of title before a contract can close. Simply, “death creates uncertainty” which needs to be resolved before closing.

There are over 15 different title commitment requirement clauses that reflect different circumstances that may have to be dealt with. Perhaps the most generic (and least helpful) is the following:

“Florida Probate of the Estate of ______________, deceased. The Company reserves the right to make further requirements with reference hereto.”

Since “Florida Probate” can take several different forms depending on the circumstances of the property and the decedent and the family and heirs, the generic requirement will usually evolve into more specific requirements after communication and explanation to the title underwriter. Non-attorney title agencies will likely not be able to do anything further other than to have the seller get an attorney and have a probate administration of the estate commenced. They remove themselves from title clearing process.

Attorney title agents are able to analyze, advise and then commence the appropriate probate proceedings AND then work with the title underwriter to address and perhaps modify the commitment requirements. Sometimes the title underwriter will list a requirement that is just not applicable, and communication will be required between the attorney agent and underwriter to get the correct requirements in place.

Some of the situations that must be addressed include:

1. Making sure creditor claims on the estate assets have been cleared – this seems to be a popular issue, especially when all parties are anxious to close and estate administration has been recently commenced.
2. If the property being sold is “homestead” (check our other blogs for that subject), it might be possible to have a shortened administration to get the property out of the probate estate and into the hands of heirs within weeks.
3. Depending on the terms of decedent’s Will and the circumstances of the Personal Representative of the estate, a court order authorizing the contract and/or closing may need to be obtained.
4. Sometimes the actual heirs must be determined before the property can be sold, which might require notifications, hearings, heir searches, and guardianships, among other issues.
5. Less frequently, an evaluation of federal estate tax liability must be undertaken, especially if the decedent was not a U.S. taxpayer.

If you determine that the property owner is or becomes deceased prior to closing, a lot of uncertainty arises in the title commitment and a competent real estate and estate administration attorney should be consulted.

Berlin Patten Ebling, PLLC

Article Authored by Christopher Caswell , Esq.

This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.

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