Bulletin: NV2014001

Date:
April 21, 2014
To:
All Nevada Issuing Offices
RE:
UNDERWRITING - Transfer on Death Deeds (Deeds Upon Death)

Dear Associates:

In 2011, Nevada adopted the Real Property Transfer on Death (Uniform Act), codified in the NRS 111.655 to 111.699. It provides for a non-probate transfer of real property upon the death of the transferor by means of a transfer on death deed, known in Nevada as a Deed Upon Death. While other states and other state bulletins refer to this topic as TODDs, pursuant to NRS 111.671, they are known in Nevada as DUDs. The Act provides sample forms of a Deed Upon Death, a Revocation Of Deed Upon Death, and Death Of Grantor Affidavit, found at NRS 111.695, 111.697, and 111.699.

Key elements of the Act are as follows:

  1. The DUD must contain all of the essential elements and formalities of a properly recordable inter vivos deed.
  2. The DUD must be executed by the transferor and properly recorded during the transferor’s lifetime in the office of the County Recorder where the property is located.
  3. The capacity required to create a DUD or revoke a DUD is the same as the capacity to make a will.
  4. Until the transferor’s death, a recorded DUD has no effect – it does not affect any right or interest of the transferor or any other person in the property.
  5. A DUD does not impact the transferor’s ability to transfer or encumber the property.
  6. A DUD is revocable any time during the transferor’s life by:

a.     Recording an instrument of revocation, or

b.    Recording an inter vivos deed to a third party, or

c.     Recording a DUD.

7. The instrument revoking the DUD must be recorded prior to the transferor’s death.

8. The beneficiary may disclaim all or part of the transferred interest by recording a disclaimer in the office of the County Recorder of the county where the property is located. 

9. Upon the death of the grantor, a declaration of value of property and a copy of the death certificate must be attached to a Death of Grantor Affidavit and recorded. 

10. The beneficiaries under a DUD take the property subject to any liens on the property at the date of death of the grantor.

11. If a transferor is a joint owner and is survived by one or more joint owners, the property belongs to the surviving joint owners with a right of survivorship. If the transferor is a joint owner and is the last surviving joint owner, the DUD is effective upon the death of the transferor.

12. A DUD does not make the property subject to claims or liens by the designated beneficiary’s creditors, but liens against the beneficiary can attach once the beneficiary acquires title upon the death of the transferor. 

In light of the above, please note the following underwriting guidelines:

  1. If title to the property is still held in the name of the transferor and the transferor is still alive, include a requirement for a revocation of the DUD.
  2. If the transferor in the DUD has conveyed the property to a third party, examine the deed to determine if it includes revocation language. If it does, no further requirements are needed. If it does not, include a requirement for a revocation of the DUD.
  3. If you are notified from a source other than an affidavit of death certificate, include a requirement for an Affidavit of Death Certificate.
  4. Include in the preliminary report the possibility of Federal Estate Tax or in the commitment the need for evidence satisfactory to the company that the estate of the deceased is not subject to any Estate Tax.
  5. If you are asked to insure a sale or refinance of the property less than 18 months after the death of the transferor, please contact your underwriter. We may require a probate prior to insuring under specific circumstances.
  6. If you have reason to believe that the transferor lacked capacity at the time of execution of the DUD, executed the DUD as a result of duress or undue influence, or if there are circumstances which may affect the validity of the execution of the DUD, please contact your local underwriter. 

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.

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