You may have heard that  living trusts are a valuable option when contemplating the manner in which to hold title. When a property is held in a living trust, title companies have particular requirements to facilitate the transaction.

Who are the parties to a trust?
From a real estate perspective likely the most common trust is the family trust in which the spouses/parents are the Trustees and their children, the beneficiaries. Those who establish the trust and transfer their property into it are known as trustors. After their passing, their children and grandchildren usually become the primary beneficiaries if the trust is to survive, or the beneficiaries receive distributions
directly from the trust if it is to close out.

What is a Living Trust?
Sometimes called a Inter-vivos Trust, the living trust is created during the lifetime of the trustor, as opposed to being created by their wills after death, and usually terminates after they die and the body of the trust is distributed to their beneficiaries.

Can a Trust hold title to Real Property?
No. The Trustee holds the property on behalf of the trust.

Is a Trust the best way to hold my property?
Only your attorney or accountant can answer this question.  As realtors are not attorneys nor CPAs, we cannot provide advice on this.  Having said that, some common reasons for holding property in a trust are to minimize or postpone death taxes, to avoid a time consuming probate, and to shield property from attack by certain unsecured creditors.

What taxes can I avoid by putting my property in a Trust?
Married persons can usually exempt a significant part of their assets from taxation and may postpone taxes after the first of them to die passes. You should check with your attorney or accountant before taking any action.

Can you homestead property which is held in a Trust?
A trustee can take any action permitted by the terms of the trust, and the typical trust agreement does give the trustee the authority to borrow and encumber real property. However, not all lenders will lend on a property held in a trust, so check with your lender first.

Can Someone else hold title for me “In Trust?”
Some people who do not wish their names to show as title holders make private arrangements with a third party trustee.  This arrangement may be illegal, and is always inadvisable because the trustee of record is the only one who is empowered to convey, or borrow against, the property, and the title insurer cannot protect you from a trustee who is not acting in accordance with your wishes despite the existence of a
private agreement you have with the trustee.