A question: If I move to Florida, will the N.J. inheritance tax be due?

From NJMoneyHelp.com:

If I move to Florida, will the N.J. inheritance tax be due?

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Q. I’m a New Jersey resident but I plan to move to Florida. I would be a Florida resident but keep both houses. Would any beneficiaries of my estate — residing in New Jersey or otherwise — be subject to the New Jersey inheritance tax?
— Dad

A. Congratulations on your planned move.

It’s complicated.

Assuming you are successful in establishing Florida as your domicile, at the time of your death any real and tangible personal property you own located in New Jersey would be potentially subject to New Jersey inheritance tax, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

The residence of the beneficiary is not a factor in determining whether or not New Jersey inheritance tax is incurred, she said.

It’s all based on the relationship of the deceased to the beneficiaries.

She said intangible property, such as bank accounts, would not be taxable.

Assets left to Class A beneficiaries, which include your children — and charities — incur no tax, she said. Class A beneficiaries include a spouse, civil union or domestic partner, parents, grandparents, descendants, stepchildren (but not step-grandchildren), and mutually acknowledged children, she said.

“If the New Jersey real and tangible personal property is specifically bequeathed to Class A beneficiaries, or all of your assets are left to Class A beneficiaries, it is possible to entirely avoid the New Jersey inheritance tax,” she said.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Buying your dream home? Buy title insurance, too.

Buying Your Dream Home? Protect Your Property with Title Insurance

Purchasing a home is an exciting time for anyone, but that joy can soon fade if problems - such as lost or forged deeds or liens on the property - are revealed. Title insurance can protect buyers.

TOP CONSIDERATIONS

Examples of common title defects:

1. Lost, forged, or incorrectly filed deeds. Deeds are the documents that show who owns the property, and if not filed correctly, can lead to unclear ownership rights. This can include titles filed in the wrong name or titles never filed at all. 
2. Fraud. This can take many forms such as falsified documents making it appear as if a mortgage is paid off.
3. Construction and other liens. Unpaid contractors, homeowner association dues or property taxes can result in liens on the property. 
4. Encroachments. Physical structures, such as a neighbor’s fence, that intrudes on the legal property boundary can create title issues at closing. We always recommend getting a survey before you buy.

Types of title policies: Owner’s and Lender’s are the two primary types of title policies. 

An owner’s policy protects you for the purchase price of your home plus legal costs if a title or ownership issue arises. It is usually issued for the amount you paid for your home and will cover you as long as you own an interest in the property. An owner’s policy is not required but is a good idea to protect your own financial interest in the property. 

A lender’s policy protects the lender, and only the lender, if a title or ownership problem comes up after the property is purchased. Unlike an owner’s policy, the dollar amount that would be paid if there was a problem with the title decreases as you pay off the loan and ends when you pay off your mortgage. A lender’s policy is usually required to get a mortgage loan. 

THINGS YOU SHOULD KNOW

Know who you’re hiring: People often choose a title insurer and/or closing agent based on a referral from their real estate agent, lender, or home builder. Get quotes from multiple companies to ensure you are getting the best price. Check with your state insurance department to make sure the company is licensed to operate in the state. 

Start early: Once you have a signed agreement to purchase real estate, you have all the information you need to start getting title insurance quotes from companies. Start searching early to avoid delaying the closing. The buyer and seller don’t have to select the same title or closing agent so shop around to find the best deal for you. In some locations it is customary for the seller to pay for the lender’s policy, read your real estate contract to find out who is responsible for the title fees. 

Be cautious: Real estate often includes transferring large sums of money between buyers, sellers, banks, and closing agents. As a result, they are also a target for cybercriminals. Call your closing agent and lender right away if someone proposes a change to the payment transfer. Check email addresses closely when transacting business online. Call your closing agent and bank right away if something doesn’t seem right.

After closing, check that the deed was recorded in the county records: You can call your county recorder’s office (in New Jersey it is either the county clerk or register of deeds) or check its website to confirm the deed was recorded properly. Ensure the name and address is correct. If you received a loan to buy the property, check for the mortgage as well which will have the lender’s name and the property address. 

Keep a hard copy of your title policy and closing protection letter in a safe place: Title insurance safeguards your ownership rights for the entire time you own the home or property. You will need the policy documents to submit a claim. Title defects may not be found until you sell a property. 

TOP FOUR THINGS TO REMEMBER

•  A lender’s policy only covers the lender, so to protect your own financial interest, consider purchasing an owner’s policy. 
• Shop around for title insurance, even if you receive a title insurer recommendation from your real estate agent, lender or builder. Only by comparing prices can you ensure you are getting the best deal. 
• Take cybersecurity seriously when communicating transaction details through e-mail and ALWAYS pick up the phone and call the closing agent and lender to verify payment transfer details.
• Keep a copy of your policy in a safe place. You will need this information to file a claim.  

 

(Thanks to our friends at National Association of Insurance Commissioners for this information.)

 

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Vested Land Services Title Topics the Deed in Lieu of Foreclosure

From the Vested Land Services LLC newsletter Title Topics - Deeds in Lieu of Foreclosure

How is the deed in lieu transaction approached by a title agent?  This is from a recent edition of our client newsletter:

 We’ve been asked to insure a title that was obtained by deed in lieu of foreclosure.  Are there any special requirements when insuring a title which was obtained by deed in lieu of foreclosure?

Well, yes, there are. And there are some underlying legal issues, too.

       First, is the creditors’ rights problem.  If we are insuring the grantee under the deed in lieu of foreclosure’s title and we are issuing the ALTA 2006 Owner Policy, the pre-printed Creditors Rights Exclusion will cover this concern and no additional exception need be added; but, if we are using the ALTA 1987 Residential “Plain Language” Policy, we must include the following exception on Schedule B: 

 Consequences of an attack on the estate or interest insured herein under the Federal Bankruptcy Law or any creditors' rights law or state insolvency law. 

        If we are insuring a conveyance by the grantee under the deed in lieu of foreclosure we must run the deed in lieu of foreclosure grantor in upper courts through the date of the insured transaction; if that grantor has filed for bankruptcy protection after the date of the deed in lieu, the stop sign is illuminated and the bankruptcy proceedings have to be reviewed.

      Second, the mortgage for which the deed in lieu of foreclosure was given may remain open until the grantee in the deed in lieu of foreclosure conveys title.  In that subsequent transaction, the mortgage must be cancelled of record.

      Third, we cannot insure a title being conveyed by a deed in lieu of foreclosure which had been previously executed and held in escrow in case of a future default.  Only deeds in lieu of foreclosure which have been currently executed may form the basis for owners’ title coverage in favor of the grantee in the deed in lieu.

      Fourth, the realty transfer fee must be paid upon recording of deed in lieu if the underlying mortgage is not discharged.

*  *  *  *

If you would like to be added to the Title Topics newsletter, please send me an email.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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VESTED LAND SERVICES LLC TITLE TOPICS

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

We issue a newsletter Vested Title Topics to our clients.  In each edition, we strive to provide our client base with information that affects their legal practice and the real estate industry, in general.

Our most recent edition is about "Daniel's Law." 

If you would like to be included in our email list, please send me an email.

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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Reverse mortgages. Mom is dead, what happens to the mortgage?

Reverse mortgage payable when owner dies.

It's a common question- what happens when the  borrower dies?  The general rule is that the  death of the borrower accelerates the due date of the loan.  The loan must be satisfied through either a mortgage refinance or sale of the property.  Practically speaking, if the estate or its heirs do not want to keep the house, it will be listed for sale and the mortgage paid off at closing when title is transferred.

Here's how the question was posed in a recent column on NJMoneyHelp.com:

Q. I just found out my mother put a reverse mortgage on her house. I live with her. Would I have to move out if she dies? She is the only person on the deed and I’m her only beneficiary.
— Helping out

A. We’re glad you found out about the reverse mortgage so you can understand the consequences.

Keep in mind that each reverse mortgage is different, but we can give you a general idea of how they work.

A reverse mortgage can be taken out in a lump sum or your mom could have decided to receive monthly payouts, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield.

“Either way, the mortgage company will have a first lien on the property for the amount it has given your mother plus accrued interest,” Gallo said.

Upon your mother’s passing, the mortgage becomes due and you would have to pay off the mortgage if you decided that you wanted to keep the house,” Gallo said. “You would need to take out a new mortgage in your name for the amount owed or come up with the cash from some other source.”

Most reverse mortgages are due within 30 days of the death of the borrower, but 90 day extensions may be granted, Gallo said.

If you are unable to pay off the mortgage, you would have to sell the home and pay off the reverse mortgage balance, Gallo said. Any remaining proceeds would be yours to keep.

“You would not be able to stay in the house without paying off the reverse mortgage,” Gallo said.

We recommend you review the legal documents for the mortgage so you can see exactly what your mother agreed to when she signed the documents.

Any  questions?  Give us a call.

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

@vestedland

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