Trust-Held Property Closings in Ohio

Buying a Home That's Held in a Trust

Many Ohio homeowners place their property into a revocable living trust as part of their estate plan, often to avoid probate and simplify the transfer of assets to heirs. If you're buying a home and discover during the title search that the seller is actually a trust rather than an individual, that's not unusual, but it does add a few extra steps to the closing process that both buyers and sellers should understand.

Why Title Companies Ask for Trust Documentation

When a trust is the seller, the title company needs to confirm that the person signing the deed actually has legal authority to act on the trust's behalf and that the transaction is permitted under the terms of the trust. This typically involves reviewing a certification of trust, a document that summarizes the key provisions of the trust relevant to the transaction, such as who the trustee is and what powers they hold, without requiring the entire trust document to be made part of the public record.

Key Documents and Questions in a Trust Closing

• Who is the current trustee, and has there been a change since the trust was created?

• Does the trust grant the trustee authority to sell real property without additional beneficiary consent?

• Is the certification of trust current and does it match the trustee's identification?

• If the original grantor has passed away, has a successor trustee properly taken over?

What Happens With a Successor Trustee

If the person who originally created the trust has died or become incapacitated, a successor trustee named in the trust document typically takes over management of the trust's assets, including any real estate. The title company will want documentation confirming this transition, which may include a death certificate, an affidavit of successor trustee, or other supporting paperwork, depending on the specifics of the trust.

Does Buying From a Trust Affect Title Insurance?

Buying property from a trust does not inherently make a transaction riskier, as long as the trust's authority and the trustee's identity are properly documented. Title insurance still protects the buyer against covered title defects, including issues that might arise from a defect in how the trust held or conveyed the property. The extra documentation review during underwriting exists precisely to catch potential problems before closing, rather than leaving them to surface later.

Irrevocable Trusts and Additional Considerations

While revocable living trusts are the most common type encountered in residential closings, some sellers hold property in an irrevocable trust, which generally cannot be amended or revoked once established. Selling property out of an irrevocable trust can involve additional layers of review, since the trustee's authority to sell may be more limited or may require consent from beneficiaries. If you're working with this type of trust, expect your title company to ask more detailed questions and potentially request the guidance of the trust's drafting attorney before closing can proceed.

Working With Your Title Company

If you're buying or selling property held in a trust, give your title company advance notice so they can request the necessary trust documentation early. This helps avoid delays close to your scheduled closing date and ensures a smooth transfer of ownership.