The Quill – June 2022

FACT PATTERN:

In 2020, our office insured a commercial transaction which included a small tract of land owned by 50 heirs. Yes, you read that correctly…50 heirs! The land was previously owned by husband and wife who had 12 children. The husband and one child predeceased the wife. The wife died in 1968. By the time the property was sold in 2020, 10 of the 12 children and several of the children’s heirs (grandchildren), 26 in total, had passed away. All of the deceased parties died intestate. Three grandchildren died within two years of the date of closing. One passed away in another state. Finally, several heirs were divorced and one of the grandchildren had an estranged spouse whom no one in the family had spoken with in many years and no one knew where he lived or if he was still alive.

The title commitment included the below estate related requirements:

1)     Recording of a deed duly authorized and executed by the heirs and their spouses of the Decedent, vesting fee simple title in the Buyer(s). Additionally, the personal representative of any heirs who died within two years of the date of the deed, must join in the execution of said deed.

2)     Receipt of proof satisfactory to the Company that the heirs shown on the Decedent’s Family Tree, attached as Exhibit B, are in fact the heirs at law of the Decedent. Evidence should be in the form of: 1) one or more affidavits of heirship from disinterested persons who are familiar with one or more branches of the family and 2) death certificates or sufficient evidence stating the date of death of any deceased heirs (i.e., obituary). The Company may make additional requirements and exceptions upon receipt and review of such information.

3)     Receipt by the Company of an Indemnification Agreement duly authorized and executed by the Personal Representative of any heirs of the Decedent, who died within two years of the date of the conveyance deed into the proposed insureds and their spouses, if any, indemnifying and holding the Company harmless from any and all losses of any kind whatsoever which it might incur as a result of payment(s) of any amounts in connection with said Estate(s).

4)     Receipt of proof satisfactory to the Company that all state and federal estate and inheritance taxes against the Estate of the Decedent have been paid in full, and that sufficient assets remain to pay all debts of said Estate.

For the three heirs who passed away within two years of the date of the closing, including the heir who died out of state, no estate file had been opened prior to date the Purchase and Sale Agreement was executed. Pursuant to NCGS 29A-17-12, the Company required the seller to open an estate in the county where the property was located, publish 1^st notice to creditors and joinder of the personal representative (PR) on the vesting deed. Also see, NCGS 28A-3-1 for the heir who passed away out of state and no estate file had been opened in the state where the heir was a resident.

Seller’s counsel was able to locate two disinterested parties who were familiar with the family to execute heirship affidavits. Also, while there were still 50 heirs who needed to execute the vesting deed and other closing documents, they all executed powers of attorneys appointing one of the decedent’s children (one of the 12 siblings) to execute the documents on their behalf. The PRs for the three heirs who passed away within two years of the closing transaction, executed the deed and closing documents in their capacity as PR. Finally, seller’s counsel certified that there were no state or federal estate and inheritance taxes associated with the estate of any of the deceased parties.

Stay tuned for next month’s article…we’ll include some final comments related to this fact pattern and discuss additional commonly asked estate questions. If you have any specific questions related to this article, please feel free to reach out to Natasha Branch directly at Natasha.Branch@fnf.com.