[WSBAPT] Title Co - indemnity agreement

[Donna Calf Robe]

List mates:
I recently opened a probate and soon after opening, the PR found a buyer for the estate owned house and closing is schedule for today. A week ago the title company requested the usual letter that there were no taxes owing.  The estate will owe WA estate tax of I'm guessing about $55k, but there are plenty of funds to pay the tax.  The title company requested the PR sign a very broad indemnity agreement in both her personal and individual capacity.  She is not a beneficiary.  They initially wanted other beneficiaries to sign as well, but there are many and some are minors so they dropped that request.  I advised her against signing it.  The title company then send another indemnity agreement yesterday afternoon, which is a little less broad, but not much, and includes an agreement that they can hold $55k back until the taxes are paid (which may be 18 months), and they can use the $55k to offset any of their damages, without notice.

I have not encountered a title company demanding this type of indemnification or holdback.  Usually they are satisfied when I include in the tax letter that the estate has sufficient funds to pay the tax.  I'm inclined the tell the PR to use a different title company, but the PR is anxious to get the sale completed.
Have others run into this?  I don't know if its now a standard practice, in which case going to another title company may not help.
Thank you,

Donna

Donna M. Calf Robe
Attorney
Brothers & Henderson, P.S.
2722 Eastlake Avenue East, Suite 200
Seattle, Washington 98102
Phone: (206) 324-4300 x113
Fax: (206) 324-3106
e-mail:  donnac at brothershenderson.com
www.brothershenderson.com<http://www.brothershenderson.com/>
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