Buying Trust Property
For many people and families, trusts present an attractive option for storing assets. Some people place assets – including real estate – into trusts for tax purposes, some do so to ease the passing of an asset to an heir or beneficiary, and some do so to protect their intentions after passing away. In any case, if you’re trying to buy property currently being held in a trust, you’ll need to have a detailed understanding of the key terms and concepts of trusts, as well as the process of buying property in trust. While it’s perfectly feasible to buy trust property, doing so requires a few extra legal hurdles to avoid complications and liabilities.
Who Has the Right?
One of the key things to understand about buying trust property is that, depending on the type of trust, the controller of the property – the trustee – may or may not have the legal right to sell it. In a Revocable Trust, which gives the trustee(s) complete control over the assets in the trust and allows them the right to liquidate the assets at any time, the trustee does have the right to sell the property.
In an Irrevocable Trust, however, trustees don’t have complete control over the assets. In fact, the assets of an Irrevocable Trust automatically belong to the Beneficiaries (those that will eventually receive the assets) – the trustees are simply fiduciaries with a binding obligation to protect the assets of the trust, and they must receive permission from the beneficiaries to liquidate the assets. If you’re buying property in an Irrevocable Trust, you’ll need to involve the beneficiaries as well as the trustees in the buying process.
The Process of Buying Trust Property
Before making the purchase, you and your attorney will need to review a number of key documents to understand the nature of the trust. Before buying, you’ll have to review the following:
- Trust Document: This outlines the nature of the trust and will tell you and your attorney who has the right to sell the property
- Title Report: This is a key document find out about any liens that might be on the property – if liens do exist, it can be difficult to take them off.
- Authorized Signer Statement: This is a great safety step to ensure you’re purchasing the property legally. This document confirms that the person who has the authority to sell the property – be that trustee or beneficiary – agrees to the sale.
Contact Your Los Angeles Trust Real Estate Agent Today!
No matter what kind of trust you’re buying from, though, you’ll need a skilled professional to review all the documents, structure the deal, and execute the agreement. At Mike Millea Probate Real Estate, Mike and his team have years of experience helping buyers navigate trusts at every level of complexity. Call us today at (310) 939-9356 or reach out to us at our contact page to discuss your real estate buying needs and we’ll work to get you the best deal possible – no matter what piece of property you’re after.