Bulletin: CA2017003

Date:
February 23, 2017
To:
All California Issuing Offices
RE:
UNDERWRITING - Transfer On Death Deeds

Dear Associates:

On January 20, 2016, we issued Bulletin CA2016001 regarding Transfer on Death Deeds. That Bulletin dealt with the provisions of the new act. Over this last year, we have had the opportunity to deal with underwriting issues, from the creation of the actual Transfer on Death Deed (TODD) to insuring a sale from the Transferee/Beneficiary of a TODD. This Bulletin is intended to provide underwriting guidelines dealing with the issuance of title insurance following the death of the Transferor.

Establish the validity and statutory compliance of a TODD.

  1. Confirm that the real property is improved with a 1 to 4 family residential dwelling, a condominium unit, or a single tract of agricultural real estate of 40 acres or less and improved with a single family residence.
  2. Confirm that the Transferor had the capacity to contract as you would for any other deed that you’re insuring or in the chain of title. 
  3. Confirm that there are no revocations of the TODD of record, including any multiple or subsequent TODDs of record. 
  4. Confirm that the property was not held as Joint Tenancy or as Community Property with Right of Survivorship. 
  5. Confirm that the TODD was recorded within 60 days from the date of execution. 
  6. Confirm that the Common Questions About The Use of This Form document is attached and recorded with the TODD. 
  7. Treat the TODD as you would any uninsured deed in the chain of title.

Establish the death of the Transferor and the transfer to the Transferee.

  1. The Transferee must record evidence of the death of the Transferor. This can be done using the “Affidavit – Death of Transferor Under Revocable Transfer on Death Deed”, click here
  2. The Transferee must have filed a “Change of Ownership Notice” pursuant to California Revenue and Taxation Code Section 480. 
  3. Confirm that the Transferor did not receive Medi-Cal benefits at the time of death. 
  4. Confirm that there is no estate tax presently due and owing, and there will not be any estate tax due and owing in the future. 
  5. Confirm that there will not be any probate or administration of the Transferor’s estate.

Time periods and other important information.

  1. An action contesting the validity of a TODD may be filed at any time by the Transferor’s personal representative or other interested person.
  2. A lis pendens may be recorded in connection with an action contesting the validity of a TODD. Anyone bringing an action and filing a lis pendens within 120 days after the date of death of the Transferor will protect their rights pending resolution of the action. An action and lis pendens may be brought and filed after 120 days from the date of death of the Transferor, but a purchaser or lender for value and in good faith may have certain protections if their interest was acquired after the 120 days and before commencement of an action and recordation of the lis pendens.
  3. To help with the information and confirmations needed, an “Affidavit Of Beneficiary(ies) to Revocable Transfer On Death Deed, click here. This Affidavit must be completed, signed, and notarized.
  4. The Act provides that the recordation of a “subsequent” TODD revokes a “previous” recorded TODD. To confirm the validity of this subsequent TODD request the recordation of a Revocation of the previous TODD.

Pursuant to CA2016001 and this Bulletin, the issuance of any title policy dealing with a TODD must be submitted to an STG Underwriter for approval.

If you have any questions regarding TODDs, please contact your California STG 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:
CA2016001 UNDERWRITING - Transfer on Death Deeds
Underwriting Manual:
4.16 Deeds Of Conveyance
Exceptions Manual:
None
Forms:
None