Articles

We hope that the following articles provide you with valuable information.  Please do not hesitate to contact us for a more in depth discussion of these topics as they may relate to your individual circumstance.


Taxation v. Probate

Our office receives many questions from individuals each year pertaining to the status of their real estate or the real estate of a family member once one of the owners dies. The most common question is "Do I have to go to Court in order to obtain good title to my property?" The most common example is the widow whose husband dies some months before and she is advised by a relative that she would have to seek court action in order to clear the title to the property and place it solely in her name. She and her husband held title as tenants by the entirety which is a common form of ownership (or as joint tenants) amongst married couples. When a couple owns property as tenants by the entirety they each own an undivided one-half of the real estate. The most important feature, however, of tenancy by the entirety is that the surviving spouse obtains full interest in the real estate upon the death of the other spouse. Thus, the widow received the full interest of the real estate immediately upon the death of her husband.

However, most people donít understand that although the property passed to the surviving joint tenant without need of Court intervention, there is in many states an estate tax issue left unresolved.  Even if no tax is owed at time of death by the decedent, most states require that a release of some sort be applied for and filed in the office where the property records lie. The recording of these releases are done so that future purchasers or mortgagees will know that no estate tax was due and no estate tax lien exists on the property.

Our office is well able to assist you in this effort should the need arise. We are glad to explain our services in this area more fully and provide you with the costs associated with our representation. If you or anyone you know falls within these circumstances, it is wise for them to consult with our office to resolve these matters.


Real Estate Title Insurance

Since the early 1980's almost all lenders nationwide have required title insurance as a prerequisite to accepting mortgages on residential and commercial real estate. Although title insurance companies have been writing such insurance since the late 1800's its popularity has grown with the onset of secondary market mortgages. These are mortgages which are originated locally and sold nationally to investors in the same way that bonds and other securities are sold. Real estate title insurance very simply is an insured statement of the conditions of one's title or ownership rights to a certain piece of real estate. The policy guarantees that the property being purchased or mortgaged is free from undisclosed liens or rights and it guarantees additionally that any confusion as to rights of ownership will be resolved in favor of the party owning the real estate or the company will refund the policy limits to the policy holder.

A party purchasing real estate is always offered the opportunity to purchase an Owner's Policy of Title Insurance by the party conducting the real estate closing. For example, you decide to purchase a house in Boston and are obtaining a mortgage to help you finance the purchase from a bank or mortgage company. The lending institution will require an attorney or title agent to research the title to the property and issue them a Lender's Policy of Title Insurance. This assures to the lender that the property is or will be owned by the purchaser, and that no defects, liens or encumbrances exist on the property that would adversely affect the marketability of the title. Furthermore, the lender's policy guarantees that the mortgage will be recorded properly and secures the property for the repayment of the loan. Since the closing attorney is already issuing a lender's policy of title insurance the buyer has the opportunity at that time to obtain an owner's policy of title insurance at a cost substantially less than the buyer would pay if the policy was not written simultaneously with the lender's policy.

The owner's policy of title insurance insures that the owner has good and marketable title to the property - free from any encumbrances or liens that would adversely affect the property with the exception of defects or liens made known to the buyer, and insures to the owner that if any such liens, encumbrances, defects or other title problems become known, the title insurer will defend the buyer's title to the property.

In many instances we are asked whether or not title insurance is necessary or advisable for the owner to purchase. We recommend the purchase of the title insurance for a few simple reasons. First, the premium for purchase of the title insurance policy is a one time charge. Since the purchaser is usually borrowing money to finance the purchase of the property, the majority of the cost of the title insurance policy has been paid for by the premiums of the lender's policy which is required by the loan. Usually for a few hundred dollars or less the owner can insure against a variety of problems which could occur in the future as relates to his property. These items include forged documents in the chain of title, signatures of mentally incompetent persons or minors which are unknown to the party reviewing the title, mistakes or inaccuracies in recording of legal documents of title, undisclosed or missing heirs, fraud in the execution or in the handling of a transaction in the prior chain of title, invalid divorces or misrepresentation of marital status of the parties signing the documents, unpaid taxes which were not paid prior to the purchase of the property, and most importantly clerical errors in the public records and claims of parties unknown because their claims have not been filed in any indices of public record. These are just a few of the issues which can arise in the title to anyone's real estate.

Our office has seen defects in titles which could not be revealed by examination of the public records. These defects arise at a time after the transaction has taken place and often purchasers suffer significant losses as a result of them. That is why owner's title insurance makes a great deal of sense. Title insurance, like any other insurance, protects against the eventuality of an unforeseen and an unfortunate circumstance.

 
 

 

Please feel free to call our office if you have any questions.

 

Fort Myers, FL

(239) 454-0572

Lehigh Acres, FL

(239) 369-8033