Bulletin: NY000066

Dear Associates:

It has come to our attention that the property owner or lender has been "shopping" the captioned title to agents of Stewart Title.

The last deed of record, recorded over a month after the death of the grantor, purports to convey title to the grantor as trustee of The Schaeffer Living Trust. One outstanding issue in this matter is that of the "delivery question".

In addition, the agent to whom the title was first brought discussed the issue of the apparent illusory nature of the instrument setting up the trust. This instrument sets up the settlor as sole trustee and sole lifetime beneficiary. It is Company policy that transfers into living trusts of this nature, which may be valid in states such as California or Florida (and usually called "grantor trusts"), are not presumed to be valid under the laws of the State of New York.

According to the agent, the settlor/trustee beneficiary left two daughters, and one of the daughters is the successor trustee and remainderman of the trust (the other is a remainderman for all or a portion of "liquid assets" of the trust).

This matter can be cleared if the will is admitted to probate, and the surrogate rules the trust valid; in which case, the first daughter can convey as successor trustee in accordance with the trust. Alternatively, if the will is admitted to probate and the surrogate rules the trust invalid, the first daughter can convey as executrix in accordance with the will. Any other scenario that has been discussed involves having the second daughter either join in the deed or execute a quitclaim deed for recording.

This title cannot be insured unless all the underwriting issues are cleared through Company Underwriting Counsel.