Sometimes in a will, the decedent will leave his/her interest in a parcel to a trust. A living person may also transfer his/her interest to a trust. Here is what you need to know when you come across either of these situations in title:
A trust is a relationship in which the grantor/trustor gives a designated trustee or trustees the right to hold title to property for the benefit of one or more beneficiaries.
When a property owner transfers his/her interest to a trust, the trust holds the title to that property. When running title, you will most likely find the transfer of property that is held by a trust under the name of the trustee, but you could also find it under the name of the trustor, or even the trust itself, so make sure to check all options. Also, keep in mind that successor trustees can be named in the event of the death or resignation of one of the original named trustees. In that case, you should include the document naming the successor trustee in your runsheet and search under his/her name as well.
When leasing or transferring property, the trustee(s) should sign the lease or deed in their capacity as trustee (for example, John Smith, trustee of the ABC Trust, dated 1/1/2021). If the trustee also happened to own his own separate interest in the tract, and wanted to lease/sell both, he could sign as John Smith, individually, and as trustee of the ABC Trust, dated 1/1/2021.
The beneficiary receives the financial benefit from the decisions made by the trustee. This may mean that the trustee leases or sells the property and then pays out the money received to the beneficiary or that the trustee transfers the property to the beneficiary at a certain point in time. Although the beneficiary may receive a benefit from the property, the title remains with the trust until it is conveyed.
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