Minors in Title to Real Estate

Minors in Title to Real Estate

 

Minors in Title to Real Estate

There are times when a minor is in title. Maybe the deed from Mom & Dad says “Susan B. Jones, a minor.” Or, when she shows up to sign papers, the Realtor® notices the nanny who brought her in. Of course, a child can inherit property. The parents never intended for the child to own it so soon, but it happens.

Are there problems with minors in title?

Custodian

Washington has adopted the Uniform Transfers to Minors Act. This is the most practical way for minors to “own” property. There is no document or agreement. The statute deals with the responsibility of the custodian to the child. Otherwise, you can have a…

Trust

A trust can be set up for a minor, either separately or by language in a will. The trustee can also transfer property to a custodian (who can even be the trustee) if the trust permits it. But if there is no trust or custodianship, you need a…

Guardian

A guardianship is often what happens when both parents are deceased without making provisions for how a minor child can deal with property. It’s not absolutely necessary unless real property must be sold or mortgaged, but a court must approve any real estate transaction.

Most of us know there may be a problem, but what is it, exactly? Can little Suzie even be in title? Can she convey or mortgage the property? How?

Well, yes a minor can be in title, and it happens all the time. That’s not the problem – if she doesn’t want (or need) to sell or mortgage the property now, she will eventually be old enough to do something with it.

But until Suzie reaches the legal age of majority, she is under a type of “disability” because she lacks the capacity to enter in to binding contracts. If she signs title away when she is 17, she can disavow it when she reaches the age of majority and for some time thereafter.

What if a minor needs to sell or mortgage the property?

The only way for Suzie to sell or take out a mortgage is for someone to go to court, open a guardianship, appoint a guardian, get a court order authorizing the transaction, and have the guardian execute the deed or mortgage. Also, if a guardian has been appointed in another state, an ancillary court proceeding will be needed because the foreign court does not have jurisdiction in Washington.

All this can be expensive and time consuming and pretty onerous if the transaction has to happen now. But, there is no alternative – the horse is already out of the barn, so to speak. The conveyance to Suzie (or her inheritance) can’t be undone.

Other ways for a minor to own real estate

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There are other more practical ways to deal with children owning real estate.  One is a trust, where title is conveyed to the trustee of the trust, or the trust is set up in a probate. In that case, the title company will need to see the trust document or the will.

A custodianship pursuant to RCW 11.114 is a simple alternative. In that case, title is conveyed to an adult of legal age: “John Paul Jones, as custodian for Susan B. Jones, under the Washington Uniform Transfers to Minors Act.” The statute provides for only one custodian per child per deed, and a trust company can be named as well, if the trust permits it. It used to be called the Uniform Gifts to Minors Act, and you might see this recital in a deed coming from another state. A deed can be accepted from a custodian in any state, which need only recite the adult custodian, the custodianship and the name of the minor.

When title is vested in a custodian, title insurers do not need to call for any proof of authority or documentation. This is an advantage of a custodianship over a guardianship for all concerned. Acknowledgments for a custodian would be for the adult individual, because there is no documentation to present to the notary, while a guardian would use the representative capacity (for a fiduciary) form.

Of course, during the custodianship the adult has a fiduciary responsibility to the minor, and can’t dispose of or use the assets for personal gain. The money from a sale of a house would still belong to the minor. But third parties, including title companies, don’t need to question where the money will end up.

What happens when the minor reaches legal age?

Once the minor reaches 18, 21 or in some cases 25 years of age (it all depends on the circumstances of the transfer), the custodian is to convey the property to the minor. But as an adult she can deal with the property in her own name. With a guardianship, the court action needs to be closed, and the property distributed to the minor.  A custodianship is a convenient way for a minor to hold title, but there can be estate planning and taxation ramifications when children own real estate. An attorney should always be consulted if a minor is or will be in title.

Questions or comments?  Please share below!

What is a Land Contract?

What is a Land Contract

What is a land contract

Seller Finances the Purchase

A land contract is an installment contract in which the seller finances the purchase. The seller maintains the deed until satisfaction. It is comparable to owner financing. The buyer gives the seller a down payment and the seller acts as a bank; financing the balance of the purchase or sale price.

The Interest Rate is Negotiated by the Parties

The interest rate is negotiated and set by the parties involved. Land contracts can be created on or used on most types of property such as residential, land only, mobile home with land, commercial, mixed use.

During the Course of a Land Contract

The buyer has possession of and equitable title to the property while the seller holds legal title. If desired, the buyer may assign and convey his/her (buyer’s) interest in this contract or any part thereof, provided, however, that such assignment or conveyance shall not impair the seller’s security in the Premises. Once the contract is in effect and for the duration thereof, the buyer will be responsible for all taxes and assessments.

The seller conveys legal title by way of a Statutory Warranty Fulfillment Deed to the buyer when the contract is paid in full and all terms are fulfilled free and clear of any liens or encumbrances other than taxes and assessments for the current year.

What is a Title Commitment

What is a Title Insurance Commitment

What is a Title Insurance Commitment

Be Aware Early of Matters & Exceptions to Coverage

A Title Commitment provides a list of the matters which will be shown as exceptions to coverage in a designated policy or policies of title insurance, if issued concurrently, covering a particular state or interest in land. It is designated to provide a preliminary response to an application for title insurance and is intended to facilitate the issuance of the designated policy or policies.

Since these exceptions may point to potential problems with an intended purchase,
it is important for all parties to review the report once it is received.

Title Commitment

Corefact ProofDownload a PDF of this article here
The Ticor Title Title Commitment is an offer to issue a policy of title insurance covering a particular estate or interest in land subject to stated exceptions.

It is normally prepared after application (order) for such policy(ies) of title insurance on behalf of the principals to a real property transaction. The Title Commitment states on its face that it is made solely to facilitate the subsequent issuance of a title insurance policy and that the insurer assumes no liability for errors in the report. Accordingly, any claim arising from a defect in title must be made under the title policy and not the Title Commitment.

If a title policy is not contemplated, a Title Commitment should not be ordered. Instead, consideration should be given to requesting a Subdivision Guarantee Report or other similar title product.

After a title order has been placed, matters relative to the title policy coverage on the subject property are assembled in a title search package and examined by skilled technicians. This is when the Title Commitment is prepared and sent to the customer. The report contains relevant information so that the parties to the transaction will become aware of matters which will not be insured against by the title company.

This report is issued before the title policy, hence the name Title Commitment.

What to Look For in a Title Insurance Company [video]

What to look for in a title insurance company


Ok so you know title insurance is important for verifying the title of your property, right? So trusting in the right company is also important. But how to you pick the best provider?

Experience, Reputation, and Reliability

Well, as you work with your real estate agent or lender, here are three things to consider when looking for a title insurance company: experience, reputation, and reliability.

Every state is different so the company you choose should have solid partnerships with local businesses, representatives with significant experience in your community, and expert knowledge of your local laws.

You also want a title company with a good reputation for solving complex problems, mediating difficult circumstances, and dealing with any situation that comes up. Because you never know what might come up! And finally you want a representative who’s backed by decades of reliability with the financial stability to be around for many years to come.

So as you work with your real estate agent or lender ask about the title company and choose one that’s experienced, reputable, and reliable!

About Title Insurance

Title policies insure owners and lenders against possible losses from claims against real property ownership. The preliminary report or commitment provides advance information on matters which will be excepted from coverage. Lenders and owners are thereby given an opportunity to correct title flaws before purchasing or lending.
Title insurance originated in the 1870’s to stem a series of land ownership problems that developed from inaccurate record searches, forgeries, and related problems. Today, it offers protection from certain items that cannot be determined from public records, such as forgeries of all types, undisclosed heirs, hidden marriages and divorces, clerical errors, and invalid legal procedures and interpretations.

Policies are written on the basis of a search of public records and other records which impart constructive notice. Remember, a deed does not prove that the seller is the owner of the property. Only title insurance can protect your interest in the property from unknown encumbrances, legal conflicts and unforeseen claims.

A policy of title insurance is like a pre-paid legal agreement. Your insurer will provide legal defense against challenges to your insured title (dependent, of course, upon the type of policy coverage ) and will reimburse you financially for losses due to the covered defects in your ownership rights.

It is important to remember that a lender’s title policy does not insure a borrower against title risks. While certain types of policies pertain to both the owner and the lender, it makes good sense to help protect your borrowers by explaining the limitations of their particular coverage.

If you have any questions regarding which policy would best suit the needs of any particular situation, contact your Ticor Title representative.

What is Title Insurance [video]

What is Title Insurance


Everyone has a checklist of things they look for when buying a house, right? Like maybe looking for a quiet tree-lined street in a neighborhood with good schools not far from work. These are all important things to consider. But what about the property’s history?

How Title Insurance Works

Over the years things like liens, easements, and subdivisions may cause confusion over who has rights to the property. And the last thing you want as a homeowner is a big kerfuffle to put your property in jeopardy! That’s where title insurance comes in. When you buy or refinance a home, title insurance confirms there are no disputes over who has rights to the property.

Here’s how it works: Unlike auto, health, or homeowners insurance where you pay a monthly premium for value after an action, you pay for title insurance upfront to protect you from future claims.

By the time you’re ready to close the deal, title insurance gives you and your lender peace of mind that any disputes or restrictions are resolved or known. To learn more about how title insurance protects your rights to your home, contact your Ticor Title representative.

How to Receive Your Closing Protection Letter in One Minute or Less

Closing Protection Letter Delivery in One MinuteTicor Title is proud to introduce a system by which we provide Closing Protection Letters (CPLs) in under one minute for our Lender Clients, providing convenience and a speedy response 24/7. When a Lender completes the CPL request form via MyTicor.com, a response via email with the completed CPL will be sent promptly.

*Note that internet connection speeds, recipient email server functionality, and technological issues outside our control may have an impact on when a recipient receives CPL.

Here’s how to access a Closing Protection Letter in under one minute:

  1. Visit MyTicor.com and click on the “CPL Request” link in the left-hand navigation menu.CPL Request Ticor Title
  2. Complete the CPL Request Form (including required fields marked with *)CPL Request Form Ticor Title
  3. Check your email. The CPL will be delivered promptly to the email address specified in the Request Form.

Need to make edits to your CPL?

Sometimes things change as a transaction progresses. If you need to make an edit to any given CPL provided by our system, click the link at the bottom of the CPL titled: “CLICK HERE TO EDIT AND RE-CREATE THIS CPL”. The current information on your CPL will appear in the form where you may make edits as needed. Click the “Submit” button to submit your change request. Your revised CPL will be delivered via email as before.

Closing Protection Letters Explained

Title insurance underwriters issue commitments and policies both through direct title operations and through title insurance agents. The title insurance underwriter/ agent relationship is a limited agency relationship wherein the agent is only granted the authority to act on behalf of the title insurance underwriter for the purpose of issuing title insurance commitments or policies. Although both title insurance underwriters and title agents perform closing and escrow functions, those closing and escrow activities are outside the scope of the limited scope of title insurance underwriter’s agency contract and relationship with the policy issuing agent. Given the limited scope of the title insurance underwriter/agent relationship the title insurer has no responsibility or liability for closing and escrow activities of a title agent.

Closing Protection Letters &
Insurance Policy Comparisons

Important Differences Between Different Types Of CommonInsurance Policies and Protections
Closing Protection Letters & Insurance Policy Comparisons

By contrast, when a direct title operation or employee of a title insurance underwriter performs closing or escrow functions the underwriter is liable for those acts because those are the direct acts of the title insurance underwriter and its employees. The closing protection letter is offered to address lender concerns over the security of funds and documents handled by a title agent that is issuing the title insurer’s policy in a particular transaction by indemnifying against actual loss if the policy issuing agent does not follow the lender’s written closing instructions regarding the disbursement of funds and documents.

The closing protection letter is an agreement to indemnify the lender for actual losses incurred by the lender caused by specific closing and escrow related actions or inactions of the title agent. The closing protection letter is not an insurance contract. The title underwriter’s indemnification obligation is subject to the conditions and exclusions to indemnification stated in the body of the letter.

Subject to state law variations, the closing protection letter indemnifies against actual loss caused by failure of the named issuing agent to comply with the written closing instructions of the addressee/lender to the extent those closing instructions relate to:

  • The status of title to the land or the validity, enforceability and priority of the lien of the mortgage, including the obtaining of documents and the disbursement of funds necessary to establish title or the lien; or
  • Fraud, dishonesty or negligence of the issuing agent in handling the addressee’s transactional funds or documents to the extent such fraud, dishonesty or negligence relates to the status of the title or the validity, enforceability and priority of the lien of the mortgage.

A strong finish to another successful year, on record revenue from commercial business

2015 Company Fact Sheet

Company Fact Sheet Full Year 2015

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Click to download Ticor Title 2015 Company Fact Sheet

Ticor Title is the nation’s largest title insurance company through its title insurance underwriters – Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York – that collectively issue more title insurance policies than any other title company in the United States.

The fourth quarter was a strong finish to 2015 for our title business, as we again led the title industry with a 13.8% pre-tax title margin. The purchase market showed continued growth, as our open and closed purchase orders grew by approximately 9% for the fourth quarter and fullyear 2015.

We had a record quarter in our commercial business, generating $303 million in total commercial revenue, an 11% increase over the fourth quarter of 2014. For full-year 2015, total commercial revenue was more than $1 billion, a 20% increase over full-year 2014.
Ticor Title 2015-Company Fact Sheet

8 Reasons Why Title Insurance is Worth the Cost [Video]

Owners title insurance


When the CFPB wrote the new rule, they didn’t see the need for the cost of the owner’s title policy to be disclosed on the loan estimate if the borrower is not going to pay for it. The new rule only requires the lender to disclose the cost of the owner’s title policy on the Loan Estimate if the borrower will be paying for the policy.

Unfortunately, if the borrower is paying for it, the charge must be labeled as optional on both the loan estimate and closing disclosure. This is a concern because telling a consumer owners title insurance is optional may dissuade home buyers from purchasing the same protection their lender receives. Title insurance is an insurance product like no other. And protects the homeowner for as long as they own their home.

Here are 8 more reasons why title insurance is worth the cost.

  1. Title Insurance protects the interests of property owners and lenders against legitimate or false title claims by previous owners or lien holders. In effect it insures the investment, unlocking its potential as a financial asset for the owner.
  2. We access, assemble, and analyze title information, in addition to handling the escrow and closing process.
  3. Title problems are discovered in more than one-third of residential real estate transactions. These “defects” must be resolved prior to closing. The most common problems are existing liens, unpaid mortgages, and recording errors of names, addresses, or legal descriptions.
  4. An Owner’s Title Insurance Policy protests the owner for as long as he or she has an interest in the property; and the premium is paid only once, at closing.
  5. Title Insurance is different from other forms of insurance because it insures against events that occured before the policy is issued, as opposed to insuring against events in the future, as health, property or life insurance do. Title Insurance is loss prevention insurance.
  6. We rely on a search of existing records to identify possible defects in order to resolve them prior to issuing a policy. We perform intensive and expensive work up-front to minimize claims. The better we do this, the lower our number of claims.
  7. Researching titles may be extremely labor-intensive since only about 15 percent of public records are computerized. The industry invests a substantial amount of time and expense to collect and evaluate title records. As a result, the industry’s claims are low compared to other lines of insurance.
  8. Dollar-for-dollar, Title Insurance may be the best investment a property owner can make to protect their interest.

Share the Value

The CFPB believes the consumer should make a decision to obtain Owner’s Title Insurance coverage based on available information. So talk the talk. Tell your customers about the value of Title Insurance. Share with them these eight values. Direct them to the American Land Title Association website where they can learn more about the importance of an Owner’s Title Policy.

The Benefits of an Owner’s Title Insurance Policy

Is Title Insurance Optional?

As part of the new CFPB rules, creditors are required to disclose the cost of a Title Insurance policy if it’s the borrower’s responsibility to pay for it. However, the charge must be listed as “optional” on both the Loan Estimate and Closing Disclosure, which might discourage homeowners from buying this protection.

So let’s talk about this word, “optional.” Yes, it’s technically optional, but for most people, owning a home is the biggest investment of their life! Don’t you think they should protect it? And by the way, creditors require their own title insurance policy. That’s how important they think it is to protect their investment.

Protection & Peace of Mind

Here’s something to consider: Title problems are discovered in more than a third of residential real estate transactions. Over the years, things like liens, easements, and subdivisions cause confusion over who has rights to the property, and the last thing the homeowner wants is drama that puts their investment in jeopardy. But when a consumer has an owner’s Title Insurance policy, these issues are known or resolved before signing on the dotted line, even things that are done illegally or without proper documentation giving borrowers peace of mind that their investment is protected for as long as they own the property.

So there’s our two cents about the value of an Owner’s Title Insurance Policy and listing it as an “optional” expense. The one-time cost for an owner’s title policy is a small price to pay for the peace of mind you gain. And the good news is we’re part of the nation’s largest family of title insurance underwriters, so we’ve got you covered.

To learn more about how the CFPB changes impact you, contact a local representative.

Ticor Title Expands to Serve 19 Counties in Washington State

Map of counties in WA where Ticor Title provides title insurance

Did you know that Ticor Title provides title insurance in 19 major counties in Washington State?

Benefits

  • Streamlined transactions across WA State
  • Work with your preferred Escrow Team
  • Consistency and unrivaled financial strength
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The past year has brought steady growth for our operation in the State of Washington and our goal is to streamline the process for our clients who have transactions across our evergreen state.

You’ll have the benefit of working with your preferred Ticor Escrow team while having the consistency and financial strength that Ticor’s Title Insurance provides.

For your convenience, we have included an illustration here that shows the areas we serve. In addition we’ve included a link to an illustrated PDF document that you can save and share for future reference.

List of counties where Ticor provides Title in WA:

  • Adams
  • Asotin
  • Benton
  • Clark
  • Cowlitz
  • Ferry
  • Franklin
  • Grant
  • Island
  • King
  • Kitsap
  • Pierce
  • San Juan
  • Skagit
  • Snohomish
  • Spokane
  • Thurston
  • Whatcom
  • Yakima

How to order

You have the choice of placing an order via MyTicor.com or contacting your local preferred Ticor Title sales executive, customer service representative, or escrow closer to open title in any of the counties highlighted here.

Open an order online

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Thank you for joining the thousands of other real estate professionals who have made Ticor Title their preferred title & escrow company in the Pacific Northwest! We are grateful for your continued support.