Ask the TITLEMAN™ - Judgment Attachments; Transfer Upon Death; After Bankruptcy
by John T. Lotardo aka TITLEMAN™-Sr VP/General Counsel, Stewart Title & Trust of Phoenix
Q. Does the lien of a judgment attach to the real estate acquired by the judgment debtor after the date of the entry of the judgment? In other words, do judgments attach to future acquired property?
A. Yes, judgments that record in the County Records become “Judgment Liens” on existing and future acquired real property of the debtor- so long as the Judgment is valid that is (renewed as required by statute every five years, domesticated in the correct court/jurisdiction, etc.)
Q. I had a request the other day for a form that somebody could use for a “Transfer Upon Death” request on a note. That was the first time I had got that request. Would you know what they could be talking about?
A. I think they are trying to transfer the holder of the note’s interest as well as the beneficial interest under a Deed of Trust at the time of death. Although there may be one, I have not seen a separate form. What I normally see is the survivorship language normally used on documents such as deeds incorporated right into the document.
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Q. I have a transaction wherein one of the sellers filed a Bankruptcy in 2002 under a Chapter 13. His repayment plan was approved. He acquired interest in the property being sold in 1998, as an heir. He told the escrow officer that he did not include this property in his Bankruptcy. The property is in foreclosure, set to go to sale soon. It doesn’t look like he had an attorney. I made a request for court approval of this sale, is that correct? Does it make a difference that the property was an inheritance with other people? This sounds like an “Ask the Titleman” question. What say you?
A. I believe you made the correct call on this. The debtor should have listed the property as an asset of his estate. Do you have any liens that are being requested to be wiped out/avoided? If not, then you want to determine if the debtor can act without Court order. Does the Chapter13 plan permit the debtor to sell his properties with only trustee approval? If so, perhaps you can get approval from the trustee to permit the sale to close. The trustee will want to review the title/settlement documents to make the decision. The trustee may even want the proceeds pending further order of the Court. Since it is unlikely that the trustee will give you approval, be prepared to get the Court order.
The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed herein.
Copyright John T. Lotardo. All rights reserved. John Lotardo (aka the TITLEMAN™) is Senior Vice-President and General Counsel for Stewart Title & Trust of Phoenix, Inc., and State Underwriting Counsel for Stewart Title Guaranty Company. He is a member of the National Advisory Councils for GoGetEscrow.com, GoGetLoan.com, GoGetNotary.com and GoGetRealEstate.com. The information supplied is of a general nature and should not be relied upon as comprehensive legal advice. Please consult with your own local legal counsel. For more about John, visit: www.GoGetEscrow.com/Get/Titleman or www.AskTheTitleman.com.