[WSBAPT] Title Co - indemnity agreement

[Jeff at bellanddavispllc.com]

Donna,

 

I am going through the exact same thing where the estate will owe Washington
State tax  in excess of six figures.  We are selling three properties in
King County.  Title Company is trying to come up with a solution; we
suggested a hold back, which it was not overly excited about.  We have not
seen its indemnity agreement, yet, but I would advise PR not to sign it if
it makes him personally liable.  Like your estate, the one I am dealing with
has plenty of cash to pay the tax.  Plus, the sales themselves will generate
substantial cash.  I suppose the reason the title company is concerned is
that it is very likely the estate tax return will be audited, which might
generate more tax.  But can the DOR attach former estate real estate after
it has been sold to a third party, good faith, purchaser?  I will let you
know what solution we arrive at.

 

Jeff

 

W. Jeff Davis

BELL & DAVIS PLLC
P.O. Box 510

720 E. Washington Street, Suite 105
Sequim WA 98382
Phone: (360) 683.1129 
Fax: (360) 683.1258 
email: jeff at bellanddavispllc.com <mailto:jeff at bellanddavispllc.com> 
 <http://www.bellanddavispllc.com/> www.bellanddavispllc.com
 
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com>
On Behalf Of Donna Calf Robe
Sent: Thursday, May 6, 2021 8:16 AM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] Title Co - indemnity agreement

 

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 <mailto:donnac at brothershenderson.com> 

 <http://www.brothershenderson.com/> www.brothershenderson.com



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