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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.
Q. What Is A Trust?
A. 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?
Q. Can A
Trust Itself Acquire And Convey Interests In Real Property?
A. 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.
Q. What Will
The Title Company Require If A Trustee Holds The Title To The Property Which Is
Part Of The Trust?
A. 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.
Q. If There
Is More Than One Trustee, Can Just One Sign?
A. Maybe. The trust must
specifically provide for less than all to sign.
Q. Can The
Trustee Give Someone A Power-Of-Attorney?
A. Only if the trust
specifically provides for the appointment of an attorney-in-fact.
Q. What Will
The Title Company Require If All The Trustees Have Died Or Are Unwilling To
Act?
A. 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.
Q. Who Can Be
A Trustee?
A. Any individual not under
a legal disability or a corporation that has qualified to do a trust business
in the state of California.
Q. How Does A
Notary Acknowledge The Signature Of The Trustee?
A. 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.
Q. My Trust
Contains Certain Amounts Of Money To Be Given To Various Charities Which Is
None Of Your Business. Can I Omit These Pages?
A. 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.
Q. How Would
The Deed To The Trustee Ordinarily Be Worded To Transfer Title To The Trustee?
A. 'John Doe and Mary Doe,
as trustees of the Doe family trust, under declaration of trust dated January
1, 1992.'
Q. Are There
Any Limitations On What A Trustee May Do?
A. 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, and refinance purposes.
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