The Pronghorn Press - Issue 3

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2016 | ISSUE 3

The

Pronghorn Press ~ A WYOMING AGENCY NEWSLETTER ~

ALIEN INVASION? By: Justin Lischak Earley, VP, Corporate Underwriting

Have you recently had an encounter with an EBE? No, we aren’t talking about extraterrestrial biological entities; we’re talking about exotic business entities! In the past few years, new and strange forms of artificial persons have begun to appear in real estate transactions. Some examples include series LLCs, statutory business trusts, family limited partnerships, and asset protection trusts. Often, these creatures were engineered in the legislative laboratories in one state (Delaware, Texas, Wyoming, etc.), but the parties to the transaction want to use these creatures for a real estate transaction in a state different than the one that created them. EBEs create a number of problems for title insurance underwriters. In situations where we are being asked to insure the EBE or a lender on the title purportedly owned by an EBE, it can be difficult to determine whether the EBE is capable of holding title in a state outside of its creation. If the EBE is already in title, it can be difficult to know whether a court may brush aside the separate existence of the EBE and permit liens and other encumbrances to attach to the property. And when the EBE is selling or mortgaging the property, it can be particularly challenging to sort out authority issues regarding the EBE.

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In This Issue Alien Invasion? Cyber Fraud & Cyber Crime Insurance

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Title Agents Only First American Comprehensive Calculator (FACC)

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Wyoming Wanders and Wonders

Our office will be closed in observance of the following 2016 holidays: THANKSGIVING DAY Thursday, November 24th THANKSGIVING DAY HOLIDAY Friday, November 25th

CHRISTMAS HOLIDAY Monday, December 26th

So, what to do? If you have a transaction involving a business entity that is out of the ordinary, reach out to underwriting early in the transaction for guidance. Armed with the right knowledge, you can stop your world from being invaded by EBEs.

The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. AMD: 09/2016

©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF


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