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In
today's world of busy probate courts and exorbitant death
taxes, the living trust has become a common manner of
holding title to real property. The following may help you
understand a few of the requirements of the title insurance
industry if title to property is conveyed to the trustee of
a living trust.
What is a trust?
An agreement between a trustor and trustee for the trustee
to hold title to and administer designated assets of the
trustor for the use and benefit of one or more
beneficiaries.
Can a trust itself acquire and convey interests in real
property?
No. The trust is an arrangement between a trustee and the
trustor. Only the trustee, on behalf of the trust, may own
and convey any interest in real property. The trustee may
only exercise the powers granted in the trust.
What will the title company require if a trustee holds
the title to the property which is part of the trust?
First, a certification that the Trust and amendments (if
any) are complete, the names of the present trustees of the
trust, and a statement that the trustees are empowered by
the trust to complete the proposed transaction.
Second, at the discretion of the title company, a full copy
of the trust and any amendments.
My trust contains certain amounts of money to be given to
various charities which is none of your business. Can I omit
these pages?
Because many different provisions may be on the same page,
the answer must be no -- but if the title company requires a
copy of the trust, it may accept a copy with those amounts
blacked out.
If there is more than one trustee, can just one sign?
Maybe. The trust must specifically provide for less than all
to sign.
Can the trustee give someone a power-of-attorney?
Only if the trust specifically provides for the appointment
of an attorney-in-fact.
What will the title company require if all the trustees
have died or are unwilling to act?
If the trustor is not able to do so, or the trust provisions
prohibit the trustor from appointing a new trustee, the
court may do so.
How does a notary acknowledge the signature of the
trustee?
Title is vested in the trustee. Hence, if the trustee is an
individual or a corporation, then the new general form of
acknowledgment will be prepared to reflect the intrinsic
nature of the trustee.
How would the deed to the trustee ordinarily be worded to
transfer title to the trustee?
"John Doe and Mary Doe, as trustees of the Doe family trust,
under declaration of trust dated January 1,1992."
Are there any limitations on what a trustee may do?
Yes, the trustee is limited principally and most importantly
by the provisions of the trust and, thus, may only act
within the terms of the trust. The probate code contains
general powers which, unless limited by the trust agreement,
are sufficient for title insurers to rely on for sale,
conveyance, and refinance purposes. |
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