Not surprisingly, a growing number of homeowners are choosing to establish a living trust instead of relying on a will. That’s because a properly prepared revocable living trust can save a family the time and cost of probate when the homeowner dies.  

It can also save on estate taxes and protect inheritances for children and grandchildren, while allowing the trustees, typically the owners of the trust, to retain control of their assets during their lifetime. Properties transferred into a revocable trust, therefore, are commonplace as part of the succession strategy endorsed by most estate planning professionals.  

To be legally binding, the majority of the trustee’s assets – including bank accounts and title to their home – must be transferred out of individual or joint ownership and into the trust. It’s a fairly simple process typically supervised by the attorney drawing up the trust. 

For a real estate agent, it can be disconcerting to discover that the property you are about to list for sale is owned by a trust asset. But since the trustee retains control of his/her assets, including the right to buy or sell them, there is little or no difference when it comes to listing the home, negotiating the sale or transferring title to a new owner. 

As your title partner, we will ask to see a copy of the trust documents so we can establish that the trustee has clear authority to manage title, and if contemplated, the right to sell the property. At closing, the trustee, or joint trustees, will be asked to sign over the deed transferring ownership to the buyer. 

If the original trustee has died, a Death Certificate and an Affidavit of Death of Trustee must be signed by the successor trustee. If the original trustee is still living but unable to perform the duties due to illness, absence, or other reasons, a letter will be needed to transfer authority to the successor trustee.   

For the sale to successfully close, it is up to the title officer to ensure that documentation is in place identifying the new trustee.   

At closing, proceeds from the sale of the home are paid to the owner of record – in this case, the trust. As long as the trustee has a bank account in the name of the trust, payment will be made to that account, and the seller – who is also the trustee – will continue to retain control. 

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This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice. 

About Bobbi Pronin

Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.