What Agents Need to Know about Trustee – Seller Transactions

Transactions involving residential assets in the name of a revocable trust could prove daunting for some real estate professionals, but not to worry. This is where an experienced escrow officer steps in to handle all the details and make the process as smooth as possible for both buyer and the seller.

The escrow officer’s primary responsibilities are to identify and verify the actual trustee, who is the legal signer for the entity.  The escrow officer will request a copy of the Trust from the owner, and can then prepare a trust certificate that designates the responsible person on behalf of the trust.   Sounds simple enough, right?

Usually trustee-seller transactions proceed without complications. However, in the case where the original trustee has died, become incapacitated or resigned, the paperwork can become more complex. It is also important to keep in mind that in most cases, if the trustee is simply unavailable, a Power Of Attorney cannot be designated by the Trustee.  It is up to the escrow officer to ensure that documentation is in place that identifies the new trustee for the sale to successfully close.  An experienced escrow officer can help you with the proper documents to enable the successor-trustee to properly represent the trust’s interests.  Some examples include:

– In the case of an original trustee still living but unable to perform the duties due to illness, being out of the country or other reasons, a letter transferring authority to the successor trustee

– In the case of death of the original trustee, a death Certificate and an Affidavit of Death of Trustee signed by the successor trustee

The real estate agent has one crucial assignment — obtaining a copy of the Trust Agreement and all Amendments.   In most cases, the seller is the original trustee, and the agent obtains a copy of the actual trust to submit to the escrow officer.  The agent keeps a copy of the trust agreement and a copy of the trust certification (prepared by the escrow officer) for their own records.

Properties transferred into a revocable trust are commonplace as part of a succession strategy recommended by estate planning professionals.   Working together, agents and escrow officers can close transactions involving seller trusts efficiently without delays by knowing what is required up front.