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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">A deed from one person as sole owner to himself/herself and a spouse, to create community property, will not affect the rights of the grantor spouse as an Insured
under a prior title insurance policy. It does not matter if that deed includes any warranties of title, because the Insured continues to be the owner. That answer is the same using any owner’s policy form since 1970.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">There are two applicable provisions of the two common owner's policy forms now in use. The first is the definition of "Insured" and the second is "Continuation
of Coverage."<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">Many conveyances that are not sales are to an entity that is automatically a successor Insured. For example, a conveyance form the Insured to another person as
Trustee of a living trust, or an LLC owned by the Grantor. For grantees defined as an Insured, there is no need for the deed to include a warranty.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">But a warranty deed is important when the Insured conveys to another, that is not a defined successor Insured, and the Insured will no longer also be an owner.
One example is a gift conveyance from the Insured to a child. Another example is conveyance to a new entity that is owned by the Insured and a new person. If the grantee is not a defined Insured, but it is not a sale, then the deed should include a warranty
such that the Insured grantor continues to have liability for the title that would entitle reimbursement from the policy if there is a title defect.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">Note that the grantee in a conveyance that is not a sale is not an Insured unless the grantee is defined as an Insured. In your example, the new grantee spouse
is not an Insured, but the previously-insured grantor spouse continues to own an interest in the property and continues to be an Insured.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">The basic owner's policy form used since 2006 states:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">1. DEFINITION OF TERMS<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">(i) the term "Insured" also includes<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">(D) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Title<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:1.5in;text-indent:-.5in"><span style="font-family:"Times New Roman",serif">(1) if the stock, shares, memberships, or other equity interests of the grantee are wholly-owned by the named Insured,
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:1.0in"><span style="font-family:"Times New Roman",serif">(2) if the grantee wholly owns the named Insured,
<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:1.5in;text-indent:-.5in"><span style="font-family:"Times New Roman",serif">(3) if the grantee is wholly-owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are
both wholly-owned by the same person or Entity, or<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:1.5in;text-indent:-.5in"><span style="font-family:"Times New Roman",serif">(4) if the grantee is a trustee or beneficiary of a trust created by a written instrument established by the Insured named in Schedule
A for estate planning purposes. <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">(ii) with regard to (A), (B), (C), and (D) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor
Insured.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif">2. CONTINUATION OF INSURANCE<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="font-family:"Times New Roman",serif;background:yellow;mso-highlight:yellow">The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured, but only so long as the Insured
retains an estate or interest in the Land,</span><span style="font-family:"Times New Roman",serif"> or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured,
<span style="background:lime;mso-highlight:lime">or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title.</span> This policy shall not continue in force in favor of any purchaser from the Insured
of either (i) an estate or interest in the Land, or (ii) an obligation secured by a purchase money Mortgage given to the Insured.
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Verdana",sans-serif;color:#1F497D">The expanded coverage residential Homeowner's title insurance policy available since 1998 is similar, that the Insured continues to have rights forever and a
grantee spouse does not have rights. It does not have the deed warranty language from the 2006 form, but keep in mind that if the Insured conveys to another without a warranty, that Insured could not have loss that is covered by the policy. That form states
both issues in the same section:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in">2. CONTINUATION OF COVERAGE<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">a. <span style="background:yellow;mso-highlight:yellow">
This Policy insures You forever, even after You no longer have Your Title</span>. You cannot assign this Policy to anyone else.
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"> <o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">b. This Policy also insures:
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in"> (1) anyone who inherits Your Title because of Your death;
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in"> <o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in">(2) Your spouse who receives Your Title because of dissolution of Your marriage;
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in"> <o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in">(3) the trustee or successor trustee of Your Trust or any Estate Planning Entity created for You to whom or to which You transfer Your Title after the Policy Date;
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in"> <o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in">(4) the beneficiaries of Your Trust upon Your death; or<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in"><o:p> </o:p></p>
<p class="MsoNormal" style="margin-left:1.0in">(5) anyone who receives Your Title by a transfer effective on Your death as authorized by law.
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:1.0in"> [(5) was added in 2010]<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">c. We may assert against the insureds identified in Section 2.b. any rights and defenses that We have against any previous insured under this Policy.<o:p></o:p></p>
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<p class="MsoNormal"><span style="font-family:"Verdana",sans-serif;color:#002060"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="color:#1F497D"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b>From:</b> wsbarp-bounces@lists.wsbarppt.com [mailto:wsbarp-bounces@lists.wsbarppt.com]
<b>On Behalf Of </b>Mark Geyer<br>
<b>Sent:</b> Wednesday, November 09, 2016 10:34 AM<br>
<b>To:</b> wsbarp@lists.wsbarppt.com<br>
<b>Subject:</b> [WSBARP] Form of deed for converting separate to community<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">More than once over the last few years our title company colleagues have advised against using QC deeds to avoid negating title insurance coverage. Does that apply to deeds for conversion of separate property of one spouse to both spouses
as community property?<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Thanks,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Mark<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="color:#1F497D">Mark J. Geyer, P.S.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">PO Box 15733<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">Seattle WA 98115<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D">(206) 849-7982 Telephone<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#1F497D"><a href="mailto:mgeyer@mgeyerlaw.com">mgeyer@mgeyerlaw.com</a><o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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