What is a Trust?
A Trust is a legal entity that can hold title to property for the benefit of one or more other persons or entities.
A Trustee is a person or entity that executes the Trust and is responsible for managing the Trust assets.
Beneficiaries are persons who are intended to benefit from the Trust. Beneficiaries own what is called the equitable title to the property held by the Trust. This means that they have a right to have the assets used for their benefit in the way directed by the Trust provisions.
A Trust Sale
For the most part, selling a home held in a trust is not too different from selling a home that a person owns outright.
The Trustee acts as the Seller, signs the disclosures, the contract and the closing documents.
A Realtor will want to see the Trust Documents to confirm that the house can be sold and that the trustee is authorized to conduct the sale. The Trust documents will also be made a part of the real estate sale.
The Trust documents will be sent to the title company who will determine if the trust is valid and that the trustee is identified as such by the trust document. In addition to the trust document, the title company may also require a Certification of Trust signed by the trust attorney, a death certificate of the trust creator and a tax ID number.
The Realtor Will Prepare Documents for the Sale of the Home
The Trust Advisory
A Trust Advisory is included in the disclosures provided to Buyers. The Trust Advisory states which disclosures the estate must provide to the buyer and which ones are exempted.
Although these reports are included in the listing documents, they are exempt disclosures: the transfer disclosure statement, the seller’s supplemental or seller’s questionnaire, smoke detector disclosure and installation, and signature on the Natural Hazard Disclosure Statement.
Nevertheless, anything that is known by the Trustee or Realtor must be disclosed.
The property is marketed and offers are received.
If the Trustee is authorized to make decisions for all parties, the Trust Sale can work like a regular sale with a 30 day escrow period, unless other terms are negotiated with the Buyer.
If the Trustee needs agreement from the heirs, the heirs are given 45 days to sign the notice of proposed action. If anyone objects, the estate needs to go to court to get the right to sell the property. If there are no objections the sale goes through.