Why is the following requirement/exception sometimes listed as a requirement/exception on my commitment for decedents in my chain of title?

1. MARCH 21, 2016
TITLE TRENDS – Federal Estate Tax
Q – Why is the following requirement/exception sometimes listed as a requirement/
exception on my commitment for decedents in my chain of title?
“Possible Federal estate tax due the United State of America by Estate of ….”
A – Internal Revenue Code Section 6324 provides that on the day someone dies a Federal estate tax lien
comes into existence without the need to actually file a lien in the appropriate public record. It is valid for
10 years, with a 30 day window to perfect the lien in the public record. Thus, any property that has an
Estate in the chain of title within the last 10 years, 30 days is subject to the lien, and the Commitment to
Insure will raise the possibility of Federal estate tax being due. The tax is calculated on the net value of the
Estate.
The net value of an Estate is calculated on the fair market value of everything in the decedent’s estate less
approved deductions (e.g., mortgages and other debts, estate administration expenses, charitable
donations, property passing to a surviving spouse, etc.) and the unified credit or basic exclusion for the year
of death. The unified credit/basic exclusion varies annually and any Estate valued at less than the exclusion
amount is not subject to Federal estate tax:
Exclusions
Often times you can determine if Federal estate tax is due by reviewing your State’s inheritance and/or
estate tax return. If the Federal estate tax is due, please contact your local underwriter to determine the
necessary steps required to have the property released.
Written by: Moira E. Hogan
Senior Underwriting Specialist
2006, 2007, 2008 - $2,000,000 2009 - $3,500,000
2010 – unlimited (no estate tax assessed) 2011 -$5,000,000
2012 - $5,120,000 2013 - $5,250,000
2014 - $5,340,000 2015 - $5,430,000
2016 - $5,450,000
Questions? Please contact your local underwriting counsel.
Contact information is on our website: www.TitleResources.com
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