Estate Planning: Catching up on readers' questio

A: Transfer on Death deeds (TOD deeds) are excellent estate planning devises. TOD deeds allow a person to add beneficiaries to the title of their real estate so that title can transfer after their death without the need for probate.

The downside to TOD deeds is that they are in fact deeds that affect the title of real estate. The beneficiary designation is attached by recording the TOD deed in the county recorder’s office.

Since a deed is recorded to name the beneficiaries, a document needs to be recorded to eliminate the beneficiaries from the title. The easiest way to remove or change TOD Deed beneficiaries is to record a new deed. By recording a new deed, the beneficiary designation can be changed or removed entirely.

Another method to remove the beneficiary designation is to record an affidavit removing the designation. Personally, I’m not a fan of the affidavit method. Seems like if you are going to record and affidavit, you might as well just record a new deed. The cost is the same and deeds are easier to understand for most people.

Q: How does a trust sell a home?

A: A trust sells a home just like everyone else. The trust enters into a sales contract, attends the closing, delivers a deed and receives the proceeds. There are obviously some things in between the signing of the contract and the closing and there will be a number of documents that will need to be signed to complete the closing, however, it’s not that different from an individual selling a home. A little different but not significantly.

One thing that will be different is the deed. An individual would sign a warranty deed or a quitclaim deed depending on the sale. A trust would also sign one of those two types of deeds but it will most likely be in the form of a Trustee’s Deed. The Trustee’s Deed will contain a number of recitals that probably won’t mean much to the trustee but attorneys and title companies love them.

The trustee may also need to demonstrate that she has the authority to actually sell the property. Remember that trusts are generally speaking confidential documents. With that in mind, the trustee may need to record something in addition to the deed to prove that they have the power and authority to actually enter into and complete the sale. The trustee may also need to prove that they are in fact the trustee. This is especially true if the trustee is a successor trustee as opposed to the grantor and original trustee.

In most cases, the trustee would execute a certificate or affidavit of trust. The requirements for a certification are in the Indiana Code and sets out certain things that should be included in the affidavit. I also attach the relevant pages of the trust agreement and a death certificate if the trustee is a successor trustee due to a death.

Once the affidavit is completed, it will likely be recorded first and the deed second. Recording an affidavit should help clear up any concerns that buyer and title company may have. It may also help avoid questions down the road when the home sells to another buyer.

Thanks for the questions, and Merry Christmas.