What to Look for When a Property is Held In a Trust

Wondering what to do when a home is being held in a trust?

It is becoming more common for property to be held in a trust.  This presents several issues of concern for a realtor when the property is to be listed and sold.  The term trust describes the holding of property by a trustee (which may be one or more persons or a corporate trust entity) in accordance with the provisions of a written trust instrument for the benefit of one or more persons called beneficiaries. A person may be both a trustee and a beneficiary of the same trust.

For real property held in trust, title must be in an entity “as trustee” of the trust.  Title purportedly held only in “the trust” (i.e., not in an entity “as trustee” of the trust) is void.  For Example:  Jane Smith as Trustee of the Joseph Smith Trust dated May 1, 2017 would be correct.  The Joseph Smith Trust dated May 1, 2017 would be incorrect.

When reviewing the written declaration of trust the attorney is looking for two things in particular:

1.    Who is the Trustee?

2.    Does the Trustee have the power to sell real property and under what circumstances?

For this reason, prior to listing a property held in trust, it is essential to review the title deed and trust instrument (or trust certificate) and make sure that title is properly held in the correct trustee and that the listing agreement is properly executed by the correct trustee.  A beneficiary of a trust who is not the trustee typically has no power to enter into any listing agreement or contract to sell the property.

The signature block for a trust is a little different from a Warranty Deed.  It should be as follows:

The John Smith Trust


By:  Jane Smith, Trustee


Finally, it should be noted in the contract that the title will not be transferred by Limited Warranty Deed as it is provided for in the Georgia Association of Realtors (GAR) Contract  but instead by Trustee’s Deed.



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