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Estate Planning: Trusts and real estate transactions
Estate planning

Estate Planning: Trusts and real estate transactions

Q: My home is in my revocable trust. I’m thinking about selling it and downsizing. Is there anything special that I have to do to sell it since a trust owns it? If I buy a new home, how do I get it into the trust?

A: There isn’t really anything special that you need to do to sell the home. The procedure is a little different but isn’t overly complicated.

Remember that since the trust owns the home, it is legally the seller in the real estate transaction. When you set up the trust, you were likely told that you could continue to treat the property as your own; and you can. However, the trust is a separate legal entity and even though you are the grantor and the beneficiary, you still have to respect the entity’s legally recognized status.

The first thing to remember is that since the trust is selling the home, the deed has to come from it. In other words, rather than personally issuing a warranty deed, the trust will issue its Trustee’s Deed. Assuming that you are also the trustee, you will still sign the deed in that capacity.

You will also likely need to prove that you are the duly appointed and acting trustee. I know that the trust document says you are, but proof may still be required.

You prove your authority as trustee by preparing and likely recording an affidavit of trust. Among other things, the affidavit of trust will contain your affirmation made under oath that you are the trustee and that you have the authority under the terms of the trust, and the laws of the State of Indiana, to sell the property.

Other than the deed and the affidavit, there probably isn’t anything else that you need to be concerned about. The closing documents will be in the name of the trust but you can sign those documents as trustee. Easy peasy.

Transferring title of the new home to the trust can be done in a couple of different ways. One way is for the trust to take title at closing. The trust would be listed as the grantee in the seller’s deed. The second option, and probably the more common method, especially if there is a lender involved, is to take title to the home personally and then convey title to the trust using a Deed in Trust. Either way should work.

Christopher W. Yugo is an attorney in Crown Point. Chris’ Estate Planning Article appears online every Sunday at www.nwi.com. Address questions to Chris in care of The Times, 601 W. 45th Ave., Munster, IN 46321 or to Chrisyugolaw@gmail.com. Chris’ information is meant to be general in nature. Specific legal, tax, or insurance questions should be referred to your attorney, accountant, or estate-planning specialist.

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