What is “Solh-e Omra” (life estate deed), and why does it require U.S. persons to apply for a specific license to transfer proceeds from Iran to the U.S.

"Solh-e Omra" deed is a legal instrument within the Iranian legal system that enables property owners (known as "Mosaleh") to fully exercise their ownership rights and interests during their lifetime and subsequently pass on ownership automatically to their chosen beneficiaries (known as "Motesaleh") upon their death. This concept closely resembles the "Life Estate Deed" used in the United States. A Solh-e Omra deed grants the designated beneficiary the capacity to assume ownership of a property without the need for probate or a court proceeding.

Due to the uncertain socio-economic climate in Iran, as well as the lengthy, costly, and complicated probate processes of the country, many Iranians desire to transfer the titles of their properties to their family members by Solh-e Omra, thereby retaining full control of their properties during their lifetimes.

While the aforementioned interests will only be transferred to the designated beneficiary in the Solh-e Omra deed upon the property owner's passing, it is important to note that, according to the current U.S. sanctions regulations, such a transfer cannot be categorized as an inheritance. This is due to the fact that the transfer of title takes place before the date specified on the original property owner's death certificate. Consequently, it falls beyond the scope of inherited property as indicated in the general licenses issued by the Office of Foreign Assets Control (OFAC). As such, U.S. person beneficiaries are required to obtain a specific license from OFAC before engaging in any transactions related to their acquired properties by Solh-e Omra in Iran.

Furthermore, based on the specifics of the case, U.S. person beneficiaries may need to voluntarily disclose their inadvertent violations of sanctions regulations to OFAC, as well.

Please feel free to contact our office if you have additional questions or concerns.