[WSBARP] [WSBAPT] Title Company Refusing to Honor TODD

Fri Apr 18 17:00:45 PDT 2025

I suspect the issue is that there are creditors. Normally the title company is assuaged by the fact that proceeds will be paid into the estate which is otherwise taxed with settling the creditor claims.

I have had situations where title companies refused to insure a sale within the 2 year claim period, and others where they required the TODD beneficiary to execute a lack of probate affidavit affirming that ALL creditor claims have been paid or provided for.

If this is how they are agreeing it is best to create liquidity to pay the claims, I might suggest the TODD beneficiaries execute a disclaimer to get the property back into the estate so that the Personal Representative can sell and address the creditor claims.

Don’t forget
RCW 64.80.120<http://app.leg.wa.gov/RCW/default.aspx?cite=64.80.120> Liability for creditor claims and statutory allowances.
A beneficiary of a transfer on death deed is liable for an allowed claim against the transferor's probate estate . . . . .

So, the Title company is right to be concerned about allowing a sale while the claims are unresolved.

Heather

Heather S. de Vrieze
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Eric Nelsen
Sent: Friday, April 18, 2025 3:55 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>; WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: Re: [WSBARP] [WSBAPT] Title Company Refusing to Honor TODD

Or maybe have PR use a B&S deed to convey to the TODD owners. Same effect, since it clears their TODD title from any possible estate clawback. Maybe Rainier Title would agree to that?

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Eric Nelsen
Sent: Friday, April 18, 2025 3:49 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com<mailto:wsbapt at lists.wsbarppt.com>>; WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: Re: [WSBARP] [WSBAPT] Title Company Refusing to Honor TODD

Have all three owners sign a warranty deed to buyer, and have the estate execute a separate PR deed (basically a bargain & sale deed, without covenant of seisin). The warranty deeds convey actual title, and the estate clears any putative clawback right caused by unpaid estate debts.

All owners and the PR all sign escrow instructions directing distribution of net proceeds in equal shares to the three owners, and report the proceeds on their SSNs and not the Estate EIN.

Not that I’ve encountered this before—just the first workaround I can come up with.

Second workaround is to bail on Rainier Title. But I think the industry in general does not like TODDs, so I’m not sure what problems you would encounter elsewhere.

Sincerely,

Eric

Eric C. Nelsen
Sayre Law Offices, PLLC
1417 31st Ave South
Seattle WA 98144-3909
206-625-0092
eric at sayrelawoffices.com<mailto:eric at sayrelawoffices.com>

From: wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com> <wsbapt-bounces at lists.wsbarppt.com<mailto:wsbapt-bounces at lists.wsbarppt.com>> On Behalf Of Brent Williams-Ruth
Sent: Friday, April 18, 2025 3:33 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com<mailto:WSBAPT at lists.wsbarppt.com>>; WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBAPT] Title Company Refusing to Honor TODD

Greetings List Members -

I have a messy probate - it's messy because after creating a Will with me years ago, my client worked with a financial adviser who had her put everything on TOD, including a TODD for her real property.  The death certificate was recorded.

Sadly, there are tons of creditor claims.  The 3 new owners of the home (via the TODD) have decided they need to sell to pay off the debts. OK, so Rainier Title is now telling me that they want the Executor to take responsibility and sell this property as a PR Deed.

In speaking with the rep from Rainier Title he stated TWICE - WE DON'T FOLLOW THE LAW.

He wants me to just write a PR deed and have the Executor "sell" this property and then take the proceeds.

Now, I would honestly LOVE to do this. It would be so much easier than having to write to each owner and say - hey, under the abatement statute I need X% back to cover the debts.   Truly, there is nothing more I would love than if this were to be under my control and just not have to deal with clawing back money that was sent out through beneficiary designations.

Can anyone out there provide me legal cover by where I and my Executor have the ability to vitiate a valid TODD (signed in 2018, btw, this was not something done death bed) and turn this into an estate sale?

I got extremely frustrated as this title representative just said "lots of attorneys will just do this..." and maybe someone reading this will.  But I am literally trying to rewrite our standards for Character and Fitness (report being published soon by SU Law online law review).

But I also acknowledge that there may be some case law out there that supports that a title company can require extra steps when the sale of property is less than one year from the date of death.

Appreciate any guidance that gives me and the PR both ethical and lawful cover.

Brent

Brent Williams-Ruth (pronouns: he/him)
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Law Offices of Brent Williams-Ruth, a division of BWR Consulting, PLLC

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