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Decedent Debt Bonds
A decedent debt bond is often needed when heirs to an estate sell the estate's real property before certain statutory time periods have elapsed. Because of the timing of the sale, the title could be subject to various risks that could arise after the title search has been completed including unpaid estate or inheritance taxes, claims by creditors of the estate, and uncertainty surrounding probate of the will. Because of these risks, the title insurer will often require that either the funds in question be held in escrow until certain statutory time periods have elapsed or that a bond be provided to protect them should a covered risk impair the marketability of the title. The bond is usually required in the amount of proceeds being distributed to the sellers/heirs. The advantage of the bond option is that the heirs/sellers receive the proceeds promptly. The risks in question ultimately remain the responsibility of the heirs/sellers, and the bond serves to guarantee the heirs/sellers will meet their potential obligations. In 1993, Scott Bond Services developed a blanket decedent debt bond form in Virginia that was used by all major title insurers. It greatly simplified the process of obtaining this coverage and dramatically reduced the cost. Scott quickly became the market leader providing the vast majority of these bonds in Virginia. While the blanket program ended in 2010, we remain committed to providing the same coverage through individual bonds with highly competitive underwriting, pricing, and the same high level of service clients have come to expect from Scott. To begin the process, please complete the application found below and fax it to us at 434.832.2287. All sellers/heirs must sign the application. In addition to the application, underwriting includes a credit check on the sellers/heirs. Underwriting turnaround is typically less than 24 hours. Once approved, you will need to send the original application and payment to us with instructions on where the bond should be sent. We usually process and mail these bonds the same day these items are received. The sellers/heirs will need to sign the original bond in order for it to be effective. Click here for our Decedent Debt Bond application If you have any questions about this service, please give us a call.
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