Are you thinking about setting up a trust, or how to sell a trust inheritance?
This article covers how to set up and how to sell real estate as a trust inheritance:
- How to set up a trust inheritance
- Named Successor Trustee vs. Beneficiary
- Who can sell a trust inheritance
- What you need to sell a trust inheritance
How to Set Up a Trust Inheritance
A property owner can set up a plan to leave their real estate as a trust inheritance. Here’s how it works:
- A property owner sets up a trust, and names a beneficiary for their property.
- While the property owner is alive, the property is held in the name of a trust.
- When the owner passes away, the property then belongs to the beneficiary.
- At that point, the beneficiary can choose to either: transfer the property into their name, OR sell it.
Named Successor Trustee vs. Beneficiary
The distinction between a beneficiary and a successor trustee is important.
The beneficiary is who will receive the trust property as an inheritance.
The named successor trustee is the person who will either manage the trust property, or distribute it to the beneficiaries.
There can be one or more named successor trustees. In addition, a trustee can also be a beneficiary.
Who Can Sell a Trust Inheritance?
The only people who can sell trust inheritance real estate are the named successor trustees of the trust. While the property is held in the name of the trust, the beneficiary cannot sell it.
If someone inherits property as a beneficiary, and wants to sell it, they have two choices:
They can move the title out of the trust and into their own name, and then sell it.
Or, they can have the named successor trustees sell the property. After the sale, the successor trustees give the beneficiary the proceeds.
What Do I Need to Sell a Trust Inheritance?
The escrow officer handling the sale will need two documents:
- A complete copy of the trust. .PDF format is easiest.
- A certified copy of the death certificate, if there is no Affidavit of Death of Trustee. If you don’t have a copy of the death certificate, the title company can order one for a fee.
For More Information
Contact me with any questions about trust inheritances and selling a property. My escrow team at Fidelity Title can help with organizing the required documentation ahead of time, to simplify the sales process.
You can also read my article about Proposition 19.
Proposition 19 passed in April 2021, and has changed some rules for inheritance property.
You can also read more about Proposition 19 on the California State Board of Equalization’s website.
