Trust Administration of Real Estate:
Real Estate is generally one of the largest and most complex assets held in trust. When the maker of the trust passes, it is then up to the successor trustee to manage the home and the wishes of the trust maker. The trustee has the duty to properly manage the property and to distribute the property if a provision to do so is listed in the trust.
In general, trust administration is not a complex process, however, real estate matters often lead to the most restless nights for trustees. These concerns include…
1) Confirming Title in Trust and Curing Title Defects: The first duty of the trustee is to confirm that the there are no title problems and that marketable title can be shown. This process is usually done by working with a real estate attorney or working directly with tax assessors or register of deeds. It is often that case that a death certificate will need to recorded with the register of deeds as well.
2) Trustee’s Maintenance of the Property: Preserving the real property is an important part of the trustee’s job. Typically, it is recommended that the trustee regularly visit the property to visually inspect. Also, it is recommended that locks be changed, valuables be removed, stop newspaper deliveries, and advise the insurance agent as to the status of the property in terms of vacancy or occupied.
3) Rental Property: If the property is being rented and the trust owns the home, the trustee should take steps including engaging an agent to manage the rental unit and reviewing the current leases and if none exist creating rental agreements.
4) Transferring Property out of the Trust Via a Sale or Distribution: The terms of the trust will guide the trustee as to whether the property should be sold or distributed to beneficiaries. Many times, the trustee will have the discretion to pick between the two options. If the property is distributed this is usually completed through a quitclaim deed from the trust to beneficiaries as co-owners (tenants in common or joint tenant with right of survivorship). If the property is sold, the trustee would follow a similar path as to whether to use a For Sale By Owner (FSBO) process with the assistance of an attorney or use a real-estate agent.
Managing real estate is one of the more complex duties of a trustee. However, with support from an experienced real-estate attorney, and a well drafted trust document from the maker’s estate, the trust administration process can usually be managed without issue.
A bit about us – Matt Devitt Law is a full service estate planning law firm located in Livonia, MI. In addition to estate planning we also provide legal counsel for small businesses and off a full suite of real estate legal services as well.
We work with our surrounding community nearby Livonia, Northville, Plymouth, Novi, Farmington Hills, and beyond. Our focus is on providing pragmatic value based solutions for your estate planning, small business, and real-estate legal needs. Give Matt a call (734) 335-0713 for a free consult.