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Closing Resources |
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Glossary |
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Deed of Title – Legally-binding document that specifies ownership, gives a Legal Description of Property, and outlines the rights granted to the Owner of the Property.
Closing Account – A temporary account used as a mediator between the financial accounts of the Grantor and Grantee while all aspects of the closing are being processed. It is used as a method of verifying for the Seller that the Buyer's funds are good, and as an assurance to the Buyer that the funds will not be disbursed until all the documents have been properly filed and all relevant fees are made known.
Estoppel Certificate – A certificate or letter from the resort that outlines the exact status of the timeshare property. It explains any maintenance fees pending, as well as the rules or restrictions on how the timeshare may be used.
Legal Description of Property – An exact description of the property, filed with public records, and is derived over time through the chain of title. Any significant changes made to the property will require an update of the Legal Description as it appears in the title
RECORDER
The public official who keeps records of transactions that affect real property in the area. Sometimes known as a “Registrar of Deeds” or “County Clerk.”
RECORDING
The noting in the registrar’s office of the details of a properly executed legal document, such as a deed, a mortgage note, a satisfaction of mortgage, or an extension of mortgage, thereby making it a part of the public record.
SETTLEMENT AGREEMENT
A written arrangement wherein parties, such as adverse beneficiaries, agree to a resolution of a dispute.
TITLE
A legal document establishing evidence of ownership.
TITLE INSURANCE
Title insurance is a contract of indemnity, which guarantees that the title is as reported and, if not reported and the owner is damaged, the title policy covers the insured for their loss up to the amount of the policy.
Title insurance assures owners that the yare acquiring marketable title. Title insurance is designed to eliminate risk or loss caused by defect in title from the past. Title insurance provides coverage only for title problems, which were already in existence at the time the policy was issued.
TITLE SEARCH
The process of examining all relevant records to confirm that the seller is the legal owner of a property and that there are no liens or other claims outstanding.
TRANSFER
A changing of ownership, such as real estate, a security or a financial account, from one party to another.
A movement of funds from one account to another.
QUIT CLAIM DEED
A deed that transfers whatever interest or title a grantor may have, without warranty.
A quit clam deed conveys only such rights as the grantor has.
WARRANTY DEED
A deed which guarantees the title from the seller to the buyer.
A warranty deed conveys specifically described rights which together comprise good title.
GRANT DEED
A form for the conveyance of interest in real property. A grant deed implies certain warranties. It implies the grantor has not previously conveyed any title to the property to another. It implies the property is, at the time of the conveyance, free from any liens allowed to be placed on the property by the grantor or grantor’s agent.
GRANTEE
One to whom a grant is made. Generally, the buyer.
GRANTOR
The grantor is the person who creates the living trust. She decides what property to include in the trust. She also decides who the beneficiaries of the trust will be. Because the trust is revocable until the grantor's death, she can change any part of the trust as often as she likes. The grantor is also known as the trustor.
DONEE
A person who receives a gift.
DONOR
A person who makes a gift.
GIFT
Where the Decedent transferred property without receiving something of equal value in return, the federal government will assess a transfer tax where the value of the gift exceeds the annual exclusion and the Decedent’s Applicable Exclusion Amount is exhausted.
GIFT SPLITTING
If the Decedent and his spouse join in giving an Annual Exclusion.
WITNESS
A person who watches you sign your will. Most states require two witnesses. They cannot be related to you and cannot be entitled to receive anything under your will.
BUY-SELL AGREEMENTS
Contractual arrangements governing the transfer of ownership interests (stock or partnership interests) in a closely held business.
CERTIFICATE OF TITLE
A written statement by an attorney or title company as to the status of a property.
CLOUD ON TITLE
An invalid encumbrance on real property, which, if valid, would affect the rights of the owner.
CO-EXECUTOR
Two or more persons serving as Executors.
COMMUNITY PROPERTY
Community Property is the rule of law followed in the following states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. All other states follow the rule of separate property.
In most cases, community property is all property acquired during the marriage. Community Property is owned equally by the wife and husband where each spouse has 50% ownership in all property acquired during the marriage. It includes money and wages earned during marriage, and anything purchased with that money - unless the spouses agree otherwise in a prenuptial agreement. However, property acquired through gift or inheritance is considered separate property, as well as property acquired before the marriage.
When determining whether property is community or separate property, you should consider the source of the money used to purchase the property. This is particularly true with insurance policies.
In a community property state, a spouse may leave only their half interest in any community property. For instance, if a coin collection is community property, the husband may only give away a one-half interest in collection through a living trust or will.
Any separate property may be fully given to anyone though a will.
COMMUNITY PROPERTY WITH RIGHT OF SURVIVORSHIP
A way for married couples to hold title to property, available in Arizona, Nevada, Texas and Wisconsin. It allows one spouse’s half-interest in community property to pass to the surviving spouse without probate.
CONSENT
A written agreement to abide by a particular decision or arrangement.
CONSIDERATION
Consideration is something that is done or promised in return for a contractual promise. For example, in a promise between A and B for the sale of A's car to B, B's payment of the price of the car (or promise to do so) is the consideration for A's promise.
Consideration is what must be given up by each party when making an agreement; this may be by means of doing or not doing an act or just promising to do or not do an act. Consideration can be defined as being a benefit to one party while being a detriment to the other one at the same time.
CONVEYANCE
The transferring of a property title from one individual to another.
CO-TRUSTEE
Two or more persons serving as Trustees.
DEATH CERTIFICATE
A formal document issued by the appropriate governmental agency confirming the name, address, and date of death of the Decedent. Any original Death Certificates must be used to obtain release of many assets, be attached to a federal Estate tax return, and so on.
DECEDENT
A person who has died.
DECLARATION OF TRUST
A written acknowledgement by one holding legal title to property that the property is held in trust for the benefit of another.
DEED
A legal document conveying title to a property.
A written document for transfer of land or real property from one person to another.
A writing or instrument under seal, containing some contract or agreement, and which has been delivered by the parties.
For a deed to be valid, it must be written or printed on parchment or paper, there must be sufficient parties, a proper subject matter which is the object of the grant, sufficient consideration, an agreement properly set forth, it must be read if desired, signed and sealed, delivered, attested by witnesses, properly acknowledged before a competent officer, and a deed should be recorded.
DEED IN LIEU
A deed given by a mortgagor to the mortgagee to satisfy a debt and avoid foreclosure. Also, called a “voluntary conveyance.”
DEED OF TRUST
The document used in some states instead of a mortgage. Title is conveyed to a trustee rather than to the borrower.
DESIGNATED BENEFICIARY
A person indicated to be the recipient of a pension or retirement plan where such designation is made with the necessary formalities.
EXECUTE
The act of signing and witnessing the signing of the will.
FILING
The procedure of mailing or delivering documents or tax returns to the Court or IRS.
JOINT OWNERSHIP
Situation where two or more people share ownership of property, securities, or rights.
JOINT PROPERTY
Joint Property is everything the husband and wife own together. This includes community property, real estate held in joint tenancy, tenancy in common and tenancy in the entirety, as well as all other property the husband and wife deem to be jointly owned.
JOINT TENANCY
A type of property ownership by two or more persons in which if one owner dies, that owner's interest automatically passes to the other joint tenant.
When two or more persons are equal owners of property. The unique aspect of joint tenancy is that as the owners die, their shares accrue to the surviving owner(s) so that the entire share is eventually held by one person. A valid joint tenancy is said to require the “four unities”: unity of interest (equal interest including equality of duration and extent), unity of title (the interests must arise from the same document), unity of possession (equal right to occupy the entire property) and unity of time (the interests of the joint tenants must arise at the same time).
Property owned by two or more persons, in equal shares, characterized by the incident of survivorship. Upon death of a joint tenant, the interest passes to the surviving joint tenants rather than to the heirs of the deceased.
JOINT TENANCY WITH RIGHT OF SURVIVORSHIP
Joint tenancy with right of survivorship is ownership of property by two or more people in which the survivors automatically gain ownership of the decedent’s interest.
LIMITED POWER OF APPOINTMENT
The right given to a person, the power holder, to direct where certain assets can be distributed. However, it cannot include the right to designate the Decedent, his Estate, or the Creditors of his Estate as recipients. This restriction will generally prevent the assets subject to a Limited Power of Appointment from being included in the Decedent’s Estate for tax purposes.
LIVING TRUST
A living trust is a legal document that allows you to give property and control of your property to a trustee. It is a legal entity - a piece of paper - that is capable of owning property.
A trust allows you to gather together in one document all your significant property. This is important if you want to make sure that your property is distributed easily and quickly after your death. The trust, not you, owns that property. This doesn't mean that you no longer have control of your assets. Since you, the grantor, will usually appoint yourself as the trust's initial trustee, you still have complete control of your property. You can do what you want with that property - you can even transfer some property out of the trust or add property to it. Most importantly, a living trust allows you to provide for the quick and efficient distribution of your property to loved ones when you die.
The trust must contain the following elements: expression of your intent to create a trust; naming your trust beneficiaries; description of the trust property; a valid trust purpose (e.g. to provide for the welfare of your children or grandchildren); and the transfer of property.
MENTAL INCAPACITATION
Point at which one is no longer able to make legally binding decisions (i.e. comatose, brain-damaged).
NOTARY
A person who has complied with a particular state’s requirements to witness documents and place a seal or stamp on them indicating that the document has been signed with a specified degree of formality. Requirements and procedures differ by state.
NOTICE OF PROBATE
Formal indication to a Beneficiary or other person that a Probate of the Decedent’s Will has or shall occur.
PERSONAL PROPERTY
Any piece of property that is moveable, as opposed to land or attached to land. For instance, cars, jewelry, furniture, all fall into the category of personal property. Personal property can be divided into community and separate property.
If specific items of personal property will be given to a named heir, describe the property in as much detail as possible in order to leave no room for doubts. For example, "To my son, John Doe, I leave my stainless steel Timex wristwatch that has a white face and black dials."
POWER OF ATTORNEY
An authority by which one person (principal) enables another (attorney in fact) to act for him.
General Power: Authorizes sale, mortgaging, etc., of all property of the principal. Invalid in some jurisdictions.
Special Power: Specifies property, buyers, price and terms. How specific it must be varies in each state.
PRINCIPAL
You (the person who creates the durable power of attorney).
REAL PROPERTY
Real property means "land" and anything attached to the land, such as a building, home, or even trees. It includes anything underneath the land as well, such as minerals or water.
RECEIPT AND RELEASE
A document signed by a Beneficiary acknowledging that he or she has received what the Will or Trust provides for, and that there are no further claims.
ADMINISTRATOR
The person appointed by the court to oversee the distribution of property of someone who dies. Usually, this person is the person named in a will as the "executor" or "personal representative."
AFFIDAVIT
Statement made, often signed under the penalties of perjury, for a specific purpose. For example, the Witnesses to a Will may sign an Affidavit stating the facts that occurred when the Will was signed.
AFFIDAVIT OF TITLE
A written statement, made under oath by a seller or grantor of real property and acknowledged by a notary public, in which the grantor: (1) identifies themselves and indicates marital status; (2) certifies that since the examination of the title on the date of the contract no defects have occurred in the title; and (3) certifies that he or she is in possession of the property (if applicable).
AGENT
Person to whom the power of attorney is granted (a.k.a. “Attorney-in-fact”).
ASSESSOR
One who estimates value of property for tax purposes.
ASSESSED VALUE
The valuation placed on property by public tax assessor for purposes of taxation.
ASSIGNMENT
A transfer to another of any property, real or personal, or of any rights or estates in said property. Common assignments are of leases, mortgages, and deed of trust, but the general term encompasses all transfers of title.
ATTORNEY-IN-FACT
Person to whom the power of attorney is granted (a.k.a. “Agent”).
BENEFICIARY
A "beneficiary" is a person who receives benefits from a will or trust (“your estate”). For example, if you leave one of your valuables to your child, that child is a beneficiary. A beneficiary is legally entitled to his share of your property only after you die.
BEQUEATH
The legal term for "making a gift" pursuant to a will.
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