By Maria Baler/Columnist
Wicked Local Dedham
Posted Sep 05, 2010 @ 07:00 AM
DEDHAM — Real estate transactions happen with increasing frequency these days, and while real estate can be easily transferred or mortgaged, it is important to seek advice from a qualified professional to adequately protect your property and maintain the integrity of your estate plan.
For example, transfers of real estate between family members and into or out of trusts are commonly done for estate and long-term care planning purposes. Further, the low interest-rate environment we are currently experiencing has made refinancing mortgages more attractive than ever. However, any time you undertake a transaction that involves your real estate, keep in mind the impact it may have on your estate plan and related matters.
Here are five facts to keep in mind when transferring or mortgaging real estate.
1. Homestead Protection can be disturbed by certain real estate transactions. A Declaration of Homestead is a document that is recorded at the Registry of Deeds to protect up to $500,000 of equity in your home from claims of creditors. A transfer of your home to a family member or a trust can disturb the homestead protection. Some attorneys interpret existing law to provide that refinancing a mortgage can terminate homestead protection if there is language in the mortgage document that waives the existing protection. If you have filed a Declaration of Homestead, make sure you seek the advice of your attorney before entering into any real estate transaction to ensure your homestead protection is maintained.
2. Changing property ownership can affect real estate tax exemptions. Some cities and towns in the commonwealth offer property tax exemptions for owner-occupants of property, for owners who meet certain financial criteria, or for veterans and their spouses. If ownership of property is transferred to a trust or to another family member, these exemptions may no longer be available. If you are eligible for a real estate tax exemption from your town, be sure to investigate this carefully before transferring title to your property so that you do not inadvertently lose a valuable benefit.
3. Title insurance policies can be voided by a change in ownership. Many people purchase owner’s title insurance when they purchase real estate. This coverage offers valuable protection against title defects. Because the decision to purchase title insurance is often made in the haste of purchasing property, many people do not remember they have title insurance. Be aware that transferring the ownership of your property to family members or to a trust can terminate your title insurance coverage. Check with your title insurance company on the steps necessary to continue your title insurance protection when you transfer your property to a trust or to a family member. Often an inexpensive rider is all that is required to continue this valuable protection.
4. Transferring property into or out of trusts should be handled with care. You may have established one or more trusts as a part of your estate plan. Real estate may be held in trust for a variety of reasons, including avoidance of probate, estate tax savings, asset protection, etc. In connection with refinancing your mortgage, your banker or real estate attorney may suggest or require that you remove the property from the trust in order to refinance the mortgage. This is not uncommon. However, it is vital that you make your estate planning attorney aware of the transaction so that she can properly advise you about transferring the property back into trust after your financing transaction is complete, and about any other effects such a transfer may have. Failure to do so may adversely affect the estate plan you so carefully created.
5. Transfers of mortgaged property must be done with awareness of the implications. If you have a mortgage on your property, a bank or other lender has agreed to lend money to you on the condition that you agree that your property will serve as security for that loan. Most mortgages prohibit any transfer of ownership without the bank’s consent; however, federal law permits transfers to certain trusts and family members under certain circumstances without violation of the terms of the mortgage. However, your mortgage, the applicable law, and the circumstances of the particular transaction should always be reviewed and legal advice obtained before undertaking a transfer of mortgaged property to determine if the consent of the bank is required.
No matter how simple a real estate transaction may seem, it is always worth taking the time to obtain good advice and ensure you understand all aspects of the transaction.
Attorney Maria Baler is an estate planning attorney and a partner with the Dedham firm Samuel, Sayward & Baler LLC. She is also a director of the Massachusetts Chapter of the National Academy of Elder Law Attorneys (MassNAELA). For more information, visit www.ssbllc.com.
Copyright 2010 The Dedham Transcript.
Showing posts with label title insurance. Show all posts
Showing posts with label title insurance. Show all posts
Monday, September 6, 2010
Monday, August 9, 2010
Title Insurance for Real Estate in Canada
Title insurance is becoming more popular in Canada with many lenders demanding it and many lawyers advising real estate buyers purchase it. If you're unfamiliar with title insurance this article will break it down for ease of understanding.
Title insurance is becoming more popular in Canada with many lenders demanding it and many lawyers advising real estate buyers purchase it. If you’re unfamiliar with title insurance this article will break it down for ease of understanding.
However, if you are thinking about buying real estate in Canada for investment purposes, as a retirement home or for vacations you should discuss your own personal need for title insurance with the lawyer you employ to look after your interests throughout the purchase process.
You may already be familiar with the term ‘title deed’ and understand that the holder of a title deed is the legal owner of the property the deed relates to. ‘Title’ is actually the legal term for property ownership. When you purchase a property in Canada searches and surveys are carried out on your behalf against the property and also the title of the home you’re interested in. The searches look at whether the title is clean or whether the property to which it relates has outstanding debts or issues against it.
When you buy real estate in Canada you should employ an independent lawyer to undertake these searches for you, however when a sale is closed not all searches may necessarily have been completed, and the results of some searches may be contested at a later date. It is in circumstances like this that issues can arise. A purchaser may find out at a date after the sale has been closed that the property they thought had clean title actually has debts or outstanding legal claims against it. In its most basic form, title insurance protects the home owner and/or mortgage lender against such occurrences.
If the purchaser takes out title insurance they are usually covered for any ‘loss or damage’ sustained if a claim that is covered under the terms of the policy is made. The terms of the policy usually cover search and survey irregularities, claims which may lead to the removal of pre-existing structures such as outbuildings, extensions, garages etc., a claim that arises due to fraud, forgery or duress, problems relating to rights of-way, pedestrian or car access etc., etc. The insurance company cover pre-existing but undiscovered risks and as with all insurance policies there are certain exemptions and excesses that you will need to understand and be happy with before you take out the policy.
If a lender requires insurance be taken out it is usually only required for the duration of the loan. If the purchaser takes out title insurance they can have it for any term and even extend it so that the policy remains in place if the insured wills the property to children after his/her death or so that it covers the new owner if the property is transferred following a sale - this usually incurs a small extra fee however.
In Canada the premium for title insurance is usually calculated at the time of the sale of the house and it is payable once by the purchaser. Certain cases exist where the vendor pays for it, certain cases exist where both the lender and the purchaser are covered by the same policy.
If you’re about to venture into the Canadian real estate market make sure you speak to a lawyer or trusted individual about your need to take out this type of insurance policy.
Taken from http://www.shelteroffshore.com/
Title insurance is becoming more popular in Canada with many lenders demanding it and many lawyers advising real estate buyers purchase it. If you’re unfamiliar with title insurance this article will break it down for ease of understanding.
However, if you are thinking about buying real estate in Canada for investment purposes, as a retirement home or for vacations you should discuss your own personal need for title insurance with the lawyer you employ to look after your interests throughout the purchase process.
You may already be familiar with the term ‘title deed’ and understand that the holder of a title deed is the legal owner of the property the deed relates to. ‘Title’ is actually the legal term for property ownership. When you purchase a property in Canada searches and surveys are carried out on your behalf against the property and also the title of the home you’re interested in. The searches look at whether the title is clean or whether the property to which it relates has outstanding debts or issues against it.
When you buy real estate in Canada you should employ an independent lawyer to undertake these searches for you, however when a sale is closed not all searches may necessarily have been completed, and the results of some searches may be contested at a later date. It is in circumstances like this that issues can arise. A purchaser may find out at a date after the sale has been closed that the property they thought had clean title actually has debts or outstanding legal claims against it. In its most basic form, title insurance protects the home owner and/or mortgage lender against such occurrences.
If the purchaser takes out title insurance they are usually covered for any ‘loss or damage’ sustained if a claim that is covered under the terms of the policy is made. The terms of the policy usually cover search and survey irregularities, claims which may lead to the removal of pre-existing structures such as outbuildings, extensions, garages etc., a claim that arises due to fraud, forgery or duress, problems relating to rights of-way, pedestrian or car access etc., etc. The insurance company cover pre-existing but undiscovered risks and as with all insurance policies there are certain exemptions and excesses that you will need to understand and be happy with before you take out the policy.
If a lender requires insurance be taken out it is usually only required for the duration of the loan. If the purchaser takes out title insurance they can have it for any term and even extend it so that the policy remains in place if the insured wills the property to children after his/her death or so that it covers the new owner if the property is transferred following a sale - this usually incurs a small extra fee however.
In Canada the premium for title insurance is usually calculated at the time of the sale of the house and it is payable once by the purchaser. Certain cases exist where the vendor pays for it, certain cases exist where both the lender and the purchaser are covered by the same policy.
If you’re about to venture into the Canadian real estate market make sure you speak to a lawyer or trusted individual about your need to take out this type of insurance policy.
Taken from http://www.shelteroffshore.com/
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