A. Circumstances Required to Insure an Unprobated Estate

ATG may be willing to insure title based upon a conveyance from all of the heirs and devisees of a decedent, without requiring formal probate proceedings. To do so you must meet the following requirements:

  1. You should use discretion in insuring an unprobated estate since it depends on your personal knowledge of the decedent and his or her heirs and devisees. You must trust the decedent's heirs and devisees and think that they are financially responsible.
  2. All the heirs and devisees must be willing to co-operate with one another and be willing to sign the deed. If even one heir refuses to cooperate, then the will must be probated to cut off his or her rights in the real estate. If the affidavit of heirship discloses unknown heirs or if a known heir cannot be located, then probate is necessary to obtain court approval for notice by publication.

B. Commitment Language

When the title search or other evidence discloses the death of a party in title, find title on Schedule A in "The heirs and devisees of __________, deceased." "Heirs and devisees" means that all the people who would inherit if the decedent had no will (determined by the intestate succession laws) and all the people who would inherit through the decedent's will should be shown in title.

Then raise the following exceptions in Schedule B of the commitment:

In the meantime, the following are noted and this Commitment is made subject to:

  1. A satisfactory table of heirship and proof of the death, testacy or intestacy, and of the value of the estate of __________, deceased, should be furnished; and this Commitment is subject to such further exceptions, if any, as may be then deemed necessary.
  2. Claims against the estate of __________, deceased.
  3. Federal and Illinois estate taxes that may be charged against the estate.
  4. Statutory rights, powers and duties of the personal representative of the said decedent, when appointed.

These exceptions may be modified or eliminated when you obtain evidence showing that the underlying matter no longer exists. In addition, the title finding may be modified to find title in the names of the heirs at law, if known to you before issuing the commitment. Please see the section below on clearing exceptions for information on how to remove these exceptions for the final policy.

C. Bond in lieu of Probate

You must charge a percentage of the sales price to insure title in situations where there is a decedent, but no probate (other than joint tenancy situations). ATG requires that you collect a charge for a "Bond in lieu of Probate" as follows: If the decedent has been deceased for:

0-1 year The charge is 2% of the purchase price
1-2 years The charge is 1% of the purchase price
More than 2 years No charge is required

One-half (1/2) of this charge is to be remitted to ATG as our risk premium for insuring the transaction. The balance of the charge is to be retained by you. This charge is in addition to the other underwriting requirements for unprobated estates.

To remit this premium to ATG, add a line to the Accounting Information Schedule, titling the charge "Bond in lieu of Probate".

Posted on: Sat, 04/10/1999 - 12:00am