Title Insurance Requirements for Insuring Trusts
In today's world of busy probate courts and exorbitant death taxes, the living trust has
become a common manner of holding title to real property. The following may help you
understand a few of the requirements of the title insurance industry if title to property is
conveyed to the trustee of a living trust.
What is a trust?
An agreement between a trustor and trustee for the trustee to hold title to and administer
designated assets of the trustor for the use and benefit of one or more beneficiaries.
Can a trust itself acquire and convey interests in real property?
No. The trust is an arrangement between a trustee and the trustor. Only the trustee, on
behalf of the trust, may own and convey any interest in real property. The trustee may only
exercise the powers granted in the trust.
What will the title company require if a trustee holds the title to the property which is
part of the trust?
First, a certification that the Trust and amendments (if any) are complete, the names of
the present trustees of the trust, and a statement that the trustees are empowered by the
trust to complete the proposed transaction. Second, at the discretion of the title company,
a full copy of the trust and any amendments.
My trust contains certain amounts of money to be given to various charities which is
none of your business. Can I omit these pages?
Because many different provisions may be on the same page, the answer must be no --
but if the title company requires a copy of the trust, it may accept a copy with those
amounts blacked out.
If there is more than one trustee, can just one sign?
Maybe. The trust must specifically provide for less than all to sign.
Can the trustee give someone a power-of-attorney?
Only if the trust specifically provides for the appointment of an attorney-in-fact.
What will the title company require if all the trustees have died or are unwilling to act?
If the trustor is not able to do so, or the trust provisions prohibit the trustor from
appointing a new trustee, the court may do so.
How does a notary acknowledge the signature of the trustee?
Title is vested in the trustee. Hence, if the trustee is an individual or a corporation, then
the new general form of acknowledgment will be prepared to reflect the intrinsic nature of
the trustee.
How would the deed to the trustee ordinarily be worded to transfer title to the trustee?
"John Doe and Mary Doe, as trustees of the Doe family trust, under declaration of trust
dated January 1,1992."
Are there any limitations on what a trustee may do?
Yes, the trustee is limited principally and most importantly by the provisions of the trust
and, thus, may only act within the terms of the trust. The probate code contains general
powers which, unless limited by the trust agreement, are sufficient for title insurers to rely
on for sale, conveyance, and refinance purposes.
Article by CLTA
become a common manner of holding title to real property. The following may help you
understand a few of the requirements of the title insurance industry if title to property is
conveyed to the trustee of a living trust.
What is a trust?
An agreement between a trustor and trustee for the trustee to hold title to and administer
designated assets of the trustor for the use and benefit of one or more beneficiaries.
Can a trust itself acquire and convey interests in real property?
No. The trust is an arrangement between a trustee and the trustor. Only the trustee, on
behalf of the trust, may own and convey any interest in real property. The trustee may only
exercise the powers granted in the trust.
What will the title company require if a trustee holds the title to the property which is
part of the trust?
First, a certification that the Trust and amendments (if any) are complete, the names of
the present trustees of the trust, and a statement that the trustees are empowered by the
trust to complete the proposed transaction. Second, at the discretion of the title company,
a full copy of the trust and any amendments.
My trust contains certain amounts of money to be given to various charities which is
none of your business. Can I omit these pages?
Because many different provisions may be on the same page, the answer must be no --
but if the title company requires a copy of the trust, it may accept a copy with those
amounts blacked out.
If there is more than one trustee, can just one sign?
Maybe. The trust must specifically provide for less than all to sign.
Can the trustee give someone a power-of-attorney?
Only if the trust specifically provides for the appointment of an attorney-in-fact.
What will the title company require if all the trustees have died or are unwilling to act?
If the trustor is not able to do so, or the trust provisions prohibit the trustor from
appointing a new trustee, the court may do so.
How does a notary acknowledge the signature of the trustee?
Title is vested in the trustee. Hence, if the trustee is an individual or a corporation, then
the new general form of acknowledgment will be prepared to reflect the intrinsic nature of
the trustee.
How would the deed to the trustee ordinarily be worded to transfer title to the trustee?
"John Doe and Mary Doe, as trustees of the Doe family trust, under declaration of trust
dated January 1,1992."
Are there any limitations on what a trustee may do?
Yes, the trustee is limited principally and most importantly by the provisions of the trust
and, thus, may only act within the terms of the trust. The probate code contains general
powers which, unless limited by the trust agreement, are sufficient for title insurers to rely
on for sale, conveyance, and refinance purposes.
Article by CLTA
Still have questions? Contact me today for a
free consultation!
free consultation!
Colin O’Neal
Buyer’s Agent
200 Rufe Snow North, Suite 202
Keller, TX 76248
(817) 898-0145 Office
(817) 898-1771 Fax
colin@househuntersdfw.com
Buyer’s Agent
200 Rufe Snow North, Suite 202
Keller, TX 76248
(817) 898-0145 Office
(817) 898-1771 Fax
colin@househuntersdfw.com
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