Call for local underwriter approval before insuring a transaction involving a life estate, remainder, or reversion. The following are general guidelines. The requirements in your state may be different.
• To insure a life estate, the estate to be insured on Schedule A should be described as “A life estate created by [describe document creating life estate]”.
• When insuring a life estate, note a Schedule B exception to “all rights, title, and interest of [insert names of all reversioners and remaindermen], their successors or assigns, as to the [reversion or remainder] interest created by [describe document creating the reversion or remainder]”.
• If the document creating the life estate includes any conditions or restrictions, note a Schedule B exception to “terms and conditions set forth in [describe document creating life estate]”.
• To insure the interest held by a reversioner or a remainderman, the estate to be insured on Schedule A should be described as “fee simple” or “remainder in fee simple”.
• When insuring the interest held by a reversioner or a remainderman, note a Schedule B exception to “all rights, title, and interest of [insert names of all life tenants], as to the life estate created by [describe document creating the life estate]”.
• If both the life tenant and reversioner or remainderman are to be insured, show the name of the insureds as “[name of life tenant] and [name of reversioner or remainderman], as their interests may appear”.
• If both the life tenant and reversioner or remainderman are to be insured, show title vested in “[name of life tenant], as to a life estate, and [name of reversioner or remainderman], as to a [reversion or remainder]”.
• All liens, voluntary and involuntary, created by or against the life tenant and the reversioners or the remaindermen must be released, reconveyed, or satisfied, or they must be or listed on Schedule B as exceptions to title.
• Some documents creating life estates give to the life tenant the power to convey or encumber the fee estate. Obtain local underwriter approval before relying on such powers to insure without the joinder of the reversioners or the remaindermen.
• If a life estate has terminated, require evidence of the death of the life tenant, or, if applicable, the person whose life was used to measure the term of the life estate. This evidence of death must be an official document (such as a properly certified Certificate of Death issued by the governmental entity of the state responsible for such certifications) and recorded in the land records. A simple affidavit or sworn statement that the life tenant has died is not sufficient.