Selling Property Titled in a Trust

By Jon Gasior, Owner and Managing Attorney, Sinclair Prosser Gasior

For many, a home is the single largest investment one will make in a lifetime. When the dream of homeownership is finally realized, it is vital to protect this asset. A big part of estate planning is how your assets are titled. At the time you create your Trust, our firm will help you re-title your home. At your final signing appointment, you will sign a deed transferring the home from you individually into the Trust. This will keep the home protected from issues such as incapacity and probate.

What happens when you are ready to sell a property that is titled in your Trust? When your property is under contract to sell, your transaction will be assigned to a title company. The title company will request a copy of your Trust or a Certificate of Trust to review. To assist in the title clearing process, the title company needs to identify the Trustees, Successor Trustees, and determine who has the authority to sell the home on behalf of the Trust.

It is now settlement day, congratulations! Your transaction has made it through inspections, appraisals, and title clearing, and the buyer’s loan is clear to close. You arrive at the closing table eager to sign the deed and get your proceeds. The settlement officer asks for wiring instructions in the name of the Trust. Instead, you hand over proof of a bank account that is held in your name personally. The settlement officer advises she cannot disburse your funds because the title to the home does not match the name on the account. You rush to your nearest financial institution to open an account in the name of the Trust but the bank representative says they too need a complete copy of the Trust for their legal department to review. This process can take several days or even up to a week. The net proceeds you planned on using to pay off a personal loan, hire contractors, or even purchase a new home tomorrow, are now inaccessible and delayed.

The best way to avoid this scenario is to open an account immediately after creating your Trust. A bank account in the name of your Trust will prevent issues when depositing proceeds once a sale is finalized. Even if you do not use the account on a daily basis, it is important to have the account readily available when assets titled in your trust need to be sold.

Here at Sinclair Prosser Gasior, you are our clients for life. We offer free ongoing support to you and your family even after your comprehensive plan is established. When preparing to list your home, meet with one of our attorneys to make sure your Trust is ready to distribute an asset.