Understanding Living Trusts
UNDERSTANDING TITLE INSURANCE REQUIREMENTS FOR LIVING TRUSTS
What is a trust?
A trust agreement is a document that spells out the rules you want followed by a third party, or trustee, for a property held in trust for a beneficiary or beneficiaries.
Who can be a trustee?
Trustees can be either any individual not under a legal disability
or a corporation qualified to do trust business by the state.
Are there any limitations to what a trustee may do?
A trustee is limited by the provisions of the trust and may only act
within the terms of the trust. The Probate Code also contains general
powers which, unless limited by the trust, are sufficient for title
insurers to rely on for sale, conveyance, and refinance purposes.
Can someone be appointed with power-of-attorney by the trustee?
Power-of-attorney can only be appointed if the trust specifically
indicates this can occur.
What will the title company require if all the trustees have died or are unwilling to act?
If the trustor is not able to act or the trust provisions prohibit the
trustor from appointing a new trustee, the court may do so.
Can just one trustee sign if the trust has more than one?
The trust must specifically provide for less than all to sign.
How is the signature of a trustee acknowledged by a notary?
Title is vested in the trustee. If the trustee is an individual or a corporation, a new general form of acknowledgment will be prepared that acknowledges the trustee.
What does the title company require when a trustee holds title to the property which is part of the trust?
The title company will require a certification of trust with the
1. Date of execution of the trust instrument,
2. Identity of the trustor and trustee as well as any individuals who may happen to have the power to revoke the trust;
3. Powers of the trustee,
5. Signature authority of the trustees,
6. Manner in which title to the trust assets should be taken,
7. Legal description of any interest in the property held by the trust,
8. Statement that the trust has not in any way been revoked or amended which would deem the certification to be incorrect
and that the certification is being signed by all currently acting
trustees of the trust.