[WSBARP] ALTA Homeowner's Title Policy Coverage for LLC as Successor Trustee

[Dwight Bickel]

There are further issues regarding Mike Zeno's question, that are not resolved by using a full warranty deed from the Insured to the LLC. This  answer is specific to the referenced 2021 Homeowner's Policy of Title Insurance.

The basic form of ALTA Owner's Title Insurance Policy since 2006 has contained a clear Successor's and Assigns paragraph allowing continuation of coverage, subject to conditions, even if no warranties of title are given in the transfer deed. That is not true for the Homeowner's Policy, and the difference was intended by the ALTA Forms Committee while I was a member.


It isn't clear in the posted question what is the nature of the LLC or its purpose. That is critical to answer the posted question. The new form of ALTA Homeowner's Policy is intended to allowing continuing coverage for the Insured to transfer to "an estate planning entity.

This policy covers You only if the Land is improved with an existing one-to-four family residence and each party named in Item 1 of Schedule A is a Natural Person or Estate Planning Entity.

Defined:
g.      “Estate Planning Entity”: A legal entity, a trust, or a trustee of a trust, if the entity or trust is established by a Natural Person for the purpose of planning the disposition of that person’s estate.

The Continuation of Coverage paragraph of the new form of the new ALTA Homeowner's Policy:

2.      CONTINUATION OF COVERAGE
a.      Your coverage under this policy continues as of the Date of Policy, so long as You:
i.       own Your Title;
ii.      own an obligation secured by a purchase money Mortgage given by a purchaser from You; or
iii.      have liability for warranties of title given by You in any transfer or conveyance of Your Title.
b.      This policy also insures:
i.        anyone who receives Your Title by operation of law upon Your death;
ii.       Your spouse who receives Your Title because of a dissolution of Your marriage;
iii.      Your Estate Planning Entity to which You transfer Your Title after the Date of Policy;
iv.      any beneficiary or distributee of Your Estate Planning Entity who receives Your Title;
v.      anyone who receives Your Title by a transfer effective upon Your death as provided by law; or
vi.     another Insured named in Item 1 of Schedule A.
c.      We may assert against any Insured identified in Condition 2.b. any rights and defenses that We have against any previous Insured under this policy.

However, as another person posted, if the Insured uses a full warranty deed, the grantee corporation would not be "an Insured," but that grantee may have a warranty claim against the Insured Grantor that protects that Insured's liability under the statutory warranties for any title matter that was covered by the policy.

In the Homeowner's Policy, there is significant extent of Covered Risks that are protections to the Insured, but would not be matters within the statutory warranties, and therefore there would be no warranty liability to the Grantor Insured and no protection to the Grantee.

I recommend the Insured should contact the title company and request a "Natural Person" endorsement that extends the Insured to include the LLC Grantee for all the protection of the original policy for title matters that existed at the date of policy, or occurred subsequently for those Covered Risks that state the coverage applies to subsequently-occurring risks.


Dwight A. Bickel

Real Property Title Advisor

Washington Title Professional

Dwight at dwightbickel.com<mailto:Dwight at dwightbickel.com>

http://dwightbickel.com<http://dwightbickel.com/>

206-484-1976




________________________________
From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> on behalf of Chris B <chrisb at firstavenuelaw.com>
Sent: Wednesday, September 30, 2026 12:50 PM
To: wsbarp at lists.wsbarppt.com <wsbarp at lists.wsbarppt.com>
Cc: wsbarp at lists.wsbarppt.com <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Coverage for LLC

We always do transfers to LLCs via SWD specifically to retain title insurance policy claims.

Christopher T. Benis
Sent from my iPad

On Sep 30, 2026, at 12:37 PM, Mike Zeno <mikez at zenolawfirm.com> wrote:



I’ve heard from time to time that if an insured natural person transfers to an LLC, the LLC will be an insured under the policy.  Can anyone explain why this is so?



I realize it depends on the policy.  But under the ALTA Homeowners Policy (2021), I’m having a hard time finding anything that provides that sort of coverage, at least explicitly.  I’ve looked at “Continuation of Coverage,” which extends coverage to breach of warranty claims against the insured.  But often the transfer into the LLC is by quit claim deed, which creates an obstacle to the warranty claim (though there are arguments to the contrary that might work).  In any case I’m looking for another basis for LLC coverage.  The definition of the insured (“You”) doesn’t seem to help.



Any thoughts?



Mike



The Law Office of G. Michael Zeno, Jr., P.S.

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