Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
 1   State of Arkansas
 2   94th General Assembly                        A Bill
 3   Regular Session, 2023                                                             SENATE BILL 151
 4
 5   By: Senator C. Penzo
 6   By: Representative Lundstrum
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 8                                     For An Act To Be Entitled
 9                  AN ACT CONCERNING THE TRANSFER OF REAL PROPERTY TO A
10                  REVOCABLE LIVING TRUST BY WARRANTY DEED; AND FOR
11                  OTHER PURPOSES.
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13
14                                                 Subtitle
15                           CONCERNING THE TRANSFER OF REAL PROPERTY
16                           TO A REVOCABLE LIVING TRUST BY WARRANTY
17                           DEED.
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20   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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22          SECTION 1.        Arkansas Code Title 23, Chapter 88, Subchapter 1, is
23   amended to add an additional section to read as follows:
24          23-88-107.        Transfer of real property into revocable living trust by
25   warranty deed — Effect of insurance coverage.
26          (a)    The transfer of real property into a revocable living trust by
27   warranty deed shall not affect the coverage of title insurance or property
28   and casualty insurance if the settlor of the revocable living trust:
29                  (1)      Is a beneficiary of the revocable living trust during the
30   lifetime of the settlor; and
31                  (2)      Remains a beneficiary of the revocable living trust during
32   the lifetime of the settlor.
33          (b)    After the transfer of real property into a revocable living trust
34   by warranty deed is effective, the trustee shall be considered insured, and
35   the insurance coverage for the revocable living trust shall be subject to the
36   defenses available to the insurance company under the policy as against the
     *LHR092*                                                                   1/26/2023 1:05:40 PM LHR092
                                                                                SB151
 1   original named insured.
 2        (c)   If a settlor is a beneficiary of the revocable living trust at the
 3   time of the transfer of real property into the revocable living trust by
 4   warranty deed, the transfer shall not:
 5              (1)   Affect the eligibility for the homestead property tax credit
 6   under § 26-26-1118 or right of redemption under § 26-37-315; or
 7              (2)   Accelerate a due-on-sale clause or similar clause under a
 8   mortgage or security interest.
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