Bulletin: AR2011002

Date:
May 18, 2011
To:
All Arkansas Issuing Offices
RE:
Homestead Property Conveyed to Revocable Trust

Dear Associates: 

A decision by the Supreme Court of Arkansas in Mary D. Fitton, As Trustee of the Mary D. Fitton Revocable Trust vs. Bank of Little Rock, No. 09-1273, dated June 3, 2010, ruled that a married person with a beneficiary interest in a property that is maintained as their principal residence is entitled to a homestead exemption, even though title to the property is held by a revocable trust.  In that case, the Court found that Mary Fitton was the settlor (trustor), the trustee, and also one of the beneficiaries of the trust.  The property was her principal place of residence.  The Court held that she did not abandon her right to homestead when she conveyed her interest to a revocable trust, and she was entitled to a homestead exemption.

Based upon the above decision, we will require the following when insuring residential property held in a trust.

A. The trustee must always execute the deed, deed of trust or mortgage.

B. Determine if the property is the principal residence of any person who is also a beneficiary of the trust. You may rely upon an affidavit from the trustee stating that the property is not the principal residence of any person who is a beneficiary of the trust, if applicable. This statement can be added to a closing affidavit.

C. If the property is the principal residence of any beneficiary of the trust, that person and their spouse must also sign the deed, deed of trust or mortgage, individually. 

If you have questions related to this bulletin, please contact your local underwriting personnel or Stewart Legal Services. 

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

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