Tuesday, October 13, 2015

"Secret" Probate Lien Went into Effect Oct. 1

Connecticut Public Act 15-05 Introduces a New Unrecorded Probate Fee Lien Upon the Death of the Owner of Connecticut Real Estate

Upon the death of an owner of Connecticut real property, Connecticut General Statute §12-398(d) creates an inchoate estate tax lien in favor of the state. Often called a “secret” lien, it is not recorded on the title but a release must be obtained and recorded before the new owner can convey clear title to a buyer.

Now, with the passage of Section 454 of Public Act 15-05, there is a new inchoate or “secret” lien to be aware of when a property is being sold by an estate or beneficiary. This section creates a lien in favor of the State to secure the probate fees payable by the estate. Similar to the inchoate estate tax lien, any person buying real property from a title successor is charged with notice of its existence even though it is not recorded.

This lien will impact all real estate practitioners who represent a buyer in a real estate transaction from an estate or beneficiary of any estate. In addition to requiring the release of the Connecticut estate tax lien, counsel will now also need to require from seller a release of the lien for probate fees from the probate court. This process will represent another step that may require some lead time and it is best to be mindful of the logistics involved in this new process. 

If you have any questions about this or any real estate matter, contact the real estate attorneys at Brown, Paindiris & Scott at 860-659-0700.