I have fielded a number of questions this week on the same or similar topic so I thought it would be timely and appropriate to recap those issues here and provide you with some general rules. As you know, each situation has its own set of facts and therefore the analysis may need to be adjusted accordingly; but this will, at least, provide you with some general guidance.
Effect of Renunciation on a Federal Tax Lien
A beneficiary of a disposition or distributee of an intestate share may renounce all or part of their interest. Once properly filed, the renunciation has the same effect as though the renouncing person predeceased the testator/intestate. It should be noted that the renouncing party cannot and will not receive any consideration for doing so (unless authorized by the court). Although the effect of renunciation treats the renouncing party as having predeceased, this does not apply to federal tax liens. Such a lien cannot be defeated by a renunciation of the property because it attaches to the real property at the moment of death.
Severing a Joint Tenancy
A joint tenancy can be unilaterally severed by any joint tenant without the consent of the non-severing joint tenant(s) by execution and delivery of a deed provided that the deed is recorded prior to the death of the severing tenant in the county where the real property is located (RPL 240-c).
Revocation of an Irrevocable Trust
An irrevocable trust by its name seems to suggest that you cannot revoke it. However, if the creator of the trust and all the beneficiaries join in to revoke then revocation of an irrevocable trust is possible pursuant to EPTL7-1.9.
Certification of Title in the Name of a Trust
A deed into a trust should be into the trustees of a trust and not the trust name alone. Exception to this rule is found in EPTL 7.1-18- if the donor is the sole trustee then title can be conveyed to the trust.
Deed required from Specific Devisee
A person who receives real property under a decedent’s will is called a devisee. In order to be characterized as a specific devisee the decedent must specifically identify the property to be received by the devisee. When a specific devise has been identified the deed must come from the specific devisee not the executor (unless it can be established that the property which is the subject of the specific devise must be sold to pay the debts of the decedent’s estate [EPTL 11-1.1(5)]).
Improper Reliance on the Mutual Indemnification Agreement
Getting a fee policy is not a cure-all for defects found in your title report. There is a list of “covered defects” in the agreement. If the defect you are raising as an exception is not listed under the “covered defects” provision of the agreement then you cannot rely on the policy to omit your exception.
As with any title you are reviewing please always feel free to contact Company counsel with the specifics of your transaction.