When a Trust is Involved in a Sales Transaction

Whether buying property in a trust or selling property out of a trust the title company will require a copy of the trust documents to review.  In many cases the settlor (creator) of the trust wants the details to remain confidential and does not want to share a copy of the full trust with anyone.  As an alternative to providing a copy of the trust instrument to the title company, the trustee may provide a Certification of Trust providing the following information:

  • a statement that the trust exists and the date the trust instrument was executed;
  • the identity of the settlor;
  • the identity and mailing address of the currently acting trustee;
  • one or more powers of the trustee or a statement that the trustee has powers necessary or appropriate to carry out the purposes of the trust;
  • whether it is a revocable or irrevocable trust and the identity of any person holding a power to revoke the trust;
  • the authority of co-trustees to sign and whether other co-trustees are required to sign;
  • the manner in which title to trust property should be taken; and
  • a statement that the trust has not been revoked, modified, or amended in any manner that would cause the representations contained in the certification to be incorrect.

A Certification of Trust may be signed by any trustee and must be dated within the last 6 months. If a Certification of Trust is utilized, copies of certain pages from the original trust are also required:

  • page showing the name of the trust, name of the settlor, and name of the trustee;
  • page showing powers of the trustee;
  • page with signatures; and
  • any amendments to the trust

Agents can help facilitate a timely and smooth closing when a trust is involved by:

  • Notifying their clients when they list a property that the title company will need a copy of the trust instrument or alternatively, a Certification of Trust;
  • Notifying their clients who intend to purchase a property in the name of a trust that the title company will need to know this information in advance so they can assist with making sure the title work is structured properly; and
  • Notifying the title company if the client intends to deed the property at a later date into a trust because there is an additional endorsement to the Owner’s Policy that can be purchased to extend coverage to the trust as well.

If you have any questions related to transactions involving a trust, please reach out to your Heritage Title escrow team. Our dedicated team of experts know what it takes to successfully close even the most complicated real estate transactions.

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