Protecting your real property in a trust can be a smart way to both safeguard and manage your assets. A trust provides directives on what happens to the holdings within the trust, ensuring they are appropriately dispersed according to the grantor's wishes.
And while a trust can help avoid the probate process in court, selling a home placed in a trust is a complex and complicated process. A trust sale requires special documentation and procedures best directed by a real estate brokerage specializing in court-supervised transactions.
What is a trust?
A trust is designed to ease the transfer of assets to a beneficiary and avoid the lengthy, complicated probate process. This legal agreement can be used for a variety of assets like vehicles, life insurance, savings accounts, and cryptocurrency. Many decide to place real property, like a home, in a trust to make the sale less complicated for their beneficiary.
Types of trusts
Revocable trust: The grantor can dissolve or change the trust at any point.
Irrevocable trust: The grantor cannot void the trust without approval from the beneficiary.
Living trust: A living trust is created by the grantor during their lifetime. It is most often revocable.
Testamentary trust: A testamentary trust becomes active only after the grantor has passed.
Considering revocable vs. irrevocable trusts
The grantor cannot alter or void the trust terms without approval from the beneficiaries in an irrevocable trust. While this type of trust allows for less control, its benefits are protected from creditors and are exempt from estate taxes. All trusts become irrevocable once the grantor or settlor has passed.
Why place your home in a trust?
Homes that go to probate often sell at a reduced price, meaning less profit for the beneficiary. If your home is in a trust, the sale process is handled by a professional trust and probate broker. An experienced broker will traverse all aspects of the sale, using their expertise to leverage a greater profit from the beneficiary.
Selling a property in a trust
The sale of real estate held in trust can occur in various ways. If the grantor is still living and wishes to sell the property, the process will depend on the trust’s type. The grantor of a revocable trust can sell the property, either claiming the funds or keeping it in the trust. If the trust is irrevocable and the grantor is still living, they will need to seek the approval of the beneficiary to proceed with the sale.
Selling with a trustee
To sell a home with a trustee:
Review all documentation to ensure the trustee has permission to sell the property.
Hire a reputable real estate broker with experience selling trust property.
Supply sufficient proof that the trust is valid. Documentation should include a Certificate of Trust signed by a trust attorney, the grantor's tax ID number, and the grantor's death certificate.
The contract can be closed once the trustee, beneficiary, and buyer agree on a sales price.
All earnings become part of the trust and can be held or distributed to the beneficiaries.
Selling without a trustee
To sell a home without a trustee:
- Review all trust documentation to ensure the trustee can transfer the property title to the beneficiary.
- Gain permission from the trustee to allow the transfer of the title.
- Complete a deed form and file it with the local property office to complete the official transaction.
- After the title transfer is complete, the beneficiary is now the property owner and can work with a broker specializing in trust sales.
Why you need an expert trust sales real estate team
The CREM Group is a boutique real estate team specializing in complex court-supervised sales. With legal and real estate expertise, the group provides dedicated and professional services for trust, probate, and other court-overseen transactions. With over 50 years of combined experience, The CREM Group can manage your trust sale with professionalism, reliability, and invaluable knowledge.