A common estate planning tool, a trust is a fiduciary relationship that is created to manage property or other assets for a third party’s benefit. There are many types of trusts, but all require a Trustee to be appointed who will manage the trust’s assets. The Trustee may be the trust’s grantor, a family member, or an independent third party.

If you are a Trustee, here’s what you should know when you need to sell real estate held in the trust.

Check to Confirm Your Power as Trustee to Sell Real Estate Assets

One of your powers as a Trustee may involve the “management, sale, lease, pledge of real estate” or some combination thereof—which essentially gives you the power to handle transactions for real estate being held in trust. But it’s important to check the details. So, your first step is to review the trust document to affirm that you actually have the power as Trustee to sell the property. Also check to determine if any approvals or consents are needed. This will vary depending on the type of trust and specific language of the trust document. It’s possible that no consent is required or that you need beneficiary approval. Once you have confirmed your power to sell the property and have the necessary authorizations, you can sign documents to effectuate the sale.

Be Sure You Have All Necessary Information and Documents

During the sale process, be certain that you and your attorney have all necessary background information and documentation regarding the trust to avoid delays on the eve of closing:

  • the trust document plus any amendments;
  • bank account details;
  • the trust’s tax identification number (if it has one);
  • information about the beneficiary(ies).

When it comes time to prepare and sign conveyancing documents, typically you will need a “Trustee Certificate” and a “Deed.” The trust itself may have been recorded when the property was first conveyed into the trust. If not, then an initial Trustee Certificate should have been recorded at that time. In some cases, if there has been a change to the Trustee(s) supporting documentation, such as resignations or appointments, this information may also need to be recorded.

With Each Transaction Step, Review the Trust Document to Ensure Compliance

After you have signed all of the necessary conveyancing documents in your capacity as Trustee, and those documents are recorded, the proceeds from the sale need to be deposited or distributed according to the trust document. In some cases, the proceeds are deposited into the trust’s bank or investment account. In other cases, the proceeds may need to be distributed amongst the beneficiaries. As the Trustee, you have a fiduciary obligation to follow the trust and act in the interests of the beneficiaries.

Consult an attorney or trust adviser to assist you thorough the process to make sure that you are administering the trust document in accordance with the trust’s established principles. Our attorneys at Mountain Dearborn will be pleased to help. Contact us here.