| The Title Process: Family Trusts |
| By Barbara Pronin |
 It stands to reason, when it comes to estate planning, that a growing number of homeowners establish a living trust instead of relying on a will. That’s because, when properly prepared, a revocable living trust can save the 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.
For the revocable living trust 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 is a fairly simple and routine process typically accomplished by an attorney, who arranges for the transfer real estate and other assets and/or provides the trustee with instructions and sample documents for transferring assets to the trust.
For a novice real estate agent, it can be disconcerting to discover that the property you are about to list for sale is owned by a trust rather than by the homeowner. 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 the new owner.
As your title partner, we will want to see a copy of the trust documents so that we can establish that the trust has clear title to the property as well as the right to sell it. At closing, the trustee, or the joint trustees in the case of a couple, will be asked to sign over the deed transferring ownership to the buyer.
As in all real estate closings, 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 of the account.
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.
This material is not intended to be relied upon as a statement of the law, and is not to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice. The 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.
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