When making an estate plan, one of the issues that frequently comes up is the family home. Many times, an estate plan will encompass transferring the home to a revocable living trust to avoid probate proceedings.
Not surprisingly, then, in handling property transfer issues, we also must consider title and title insurance.
In today’s post we’ll give you a brief introduction to title and title insurance. We’ll discuss what title insurance is, and why you need it.
What is Title Insurance Anyway?
Title insurance is a way of protecting yourself against lawsuits or other financial loss related to real estate. It ensures that you have good title to real property (i.e., that you own it without any sort of unknown title defects, such as a liens, or a mortgage that was never paid off, etc.).
Title insurance is commonly used in real estate transfers (i.e., when buying or selling real property) or when getting a mortgage for real property.
Title insurance is always required when you get a mortgage. When you take out a mortgage to buy real property, whether you realize it or not, you get title insurance during the closing process.
Unlike other insurance, the purpose of title insurance is prevent risks—not to pay for them after they happen. To do this, title companies review the entire history of a property’s title to find and eliminate any title issues before the transaction goes through.
Why you need it.
As mentioned above, title insurance can help protect you against loss connected to your real estate. This is important —whether you have a mortgage or not.
Having title insurance for your property can protect you against a number of title defects and problems with title including (not limited to) some of the following:
- Mistakes made in recording or indexing legal documents
- Forgeries and fraud
- Unpaid taxes and assessments
- Judgments and liens against the property
- Improper execution of documents
This list is by no means all-inclusive. It simply points out that having title insurance, even if you no longer have a mortgage, can protect you against covered title defects.
Regardless of whether you have a mortgage on your property or not, if you have title insurance and you need to submit a claim to the title insurance company, they are responsible for correcting the problem—saving you a lot of money.
Protecting Your Family is Just a Phone Call Away.
Don’t leave planning for your future and that of your loved ones to chance. All it takes is one phone call to SJF Law Group to ensure that your wishes will be followed, and your loved ones taken care of when you are gone. We expertly guide individuals through the complex probate process, and capably handle all aspects of the creation, administration, and settlement of trusts as well. When you work with the estate planning attorneys at SJF Law Group, you get more than just an estate plan: you get peace of mind. Call us at 954-580-3690 or email us at: [email protected] today.