Getting the trust, title and real estate pieces lined up before putting an inherited home on the market

If you’ve become the successor trustee of a family trust that owns a home, you may assume that selling the property begins with cleaning it out, making repairs or calling a real estate broker.

There’s actually an important step that should come first:

Make sure you have the authority and documentation you’ll need to move forward with the property.

This is one of those details that’s much easier to address at the beginning than to discover halfway through a sale.

Start by Confirming How the Property Is Held

One of the first things I like to do is look at how title to the property is currently held.

A trust itself doesn’t technically hold title to real property; the trustee holds title on behalf of the trust. When the original trustee has died or is no longer serving, documentation may be needed to establish who the currently acting trustee is and that person’s authority to act on behalf of the trust.

Exactly what is required can vary depending on the trust, the property’s title history and the circumstances surrounding the change in trustee.

This is where the appropriate estate attorney and title professionals become important.

Don’t Wait Until You Receive Offers to Address the Paperwork

One of my goals when working with a successor trustee is to identify potential title or documentation issues early.

I don’t want my client to put the home on the market, receive an offer, and then discover that we’re missing something important that could delay the sale.

Depending on the circumstances, the title company may need information or documentation concerning the trust, the identity of the currently acting trustee, the trustee’s authority and how title is held.

The title company will determine what it needs in order to insure the eventual transfer of the property, and an estate or trust attorney can advise the trustee about legal documents that may need to be prepared, signed or recorded.

My role is to help get those conversations started early and keep the real estate side coordinated.

I Bring the Right Title Professionals Into the Process Early

Early in the process, I bring in knowledgeable title professionals I trust to help us review how ownership currently appears in the public record and identify recorded matters that may affect the property.

For a trust sale, I want someone experienced with these transactions looking at the title situation early enough to identify what may be required from the successor trustee.

If additional trust or estate documentation is needed—or if something needs to be addressed by the estate or trust attorney—I’d much rather identify that before the property is on the market and receiving offers.

The goal is simple: get the right questions in front of the right professionals before they have a chance to become last-minute problems.

Gather What You Already Have

You don’t need to understand every page of the trust before asking for help.

If you’re the successor trustee, it’s helpful to gather the documents and information you already have available, which may include:

  • The trust and any amendments
  • A death certificate, when applicable
  • Documents concerning your appointment or succession as trustee
  • Mortgage or loan information, if applicable
  • Contact information for the estate or trust attorney and CPA

That’s enough to get started.

Not every document on this list will be needed in every situation, and there may be other documents required depending on the trust and the property.

You don’t need to figure that out yourself.

I can help obtain and review the available property and title information, involve the title professionals early, and help identify which questions or documents need to go to your attorney, CPA or other professionals.

This Is Also a Good Time to Identify the Rest of the Team

An inherited-home sale can involve several professionals, and they don’t all do the same job.

Your attorney can advise you about the trust, your authority and legal requirements.

Your CPA or tax professional can advise you about tax matters.

The title professionals I bring into the process can help identify title requirements and what may be needed to insure the eventual transfer of the property.

And as your real estate broker, I help coordinate the real estate side—helping you evaluate your options, preparing the property, coordinating vendors, marketing the home, negotiating the sale and keeping the many pieces moving in the right direction.

I suggest starting with the professionals you already have. I work well with the team you trust and help fill the gaps when needed. As questions come up, I can also connect you with experienced professionals who can provide the appropriate guidance.

I believe it’s important to identify those questions early. If a real estate decision could have significant legal, tax or title implications, I’d much rather make sure you have an opportunity to discuss them with the appropriate qualified professional before we move too far down a particular path.

Why I Believe in Doing This Homework Early

Successor trustees already have enough responsibilities.

The last thing I want is for something preventable to become an emergency simply because no one looked at it until the last minute.

That’s why I like to do some homework before we ever put the home on the market.

Who has authority to act?

How is title held?

Is there anything unusual on the preliminary title report?

Do the title professionals have what they need?

Are there questions that should go to the estate attorney or CPA?

Once those pieces are identified, we can turn our attention to the house itself: the belongings, preparation, value, timing and eventual sale.

It’s another example of something I’ve learned throughout my career:

Almost any complicated situation becomes more manageable when you break it into the right pieces—and handle them in the right order.

You Don’t Need to Know What Documents You Need Before Calling Me

This is probably the most important point.

You don’t need to arrive with a perfectly organized trust binder and a checklist of title requirements.

If you’re serving as successor trustee for a home in Los Angeles or Ventura County, we can begin by looking at where things stand today.

We’ll identify the real estate questions, bring in experienced title professionals early, and determine which questions need to go to your attorney, CPA or other professionals.

Then we can start putting the pieces in order.

A Final Thought

Being a successor trustee doesn’t mean you have to become an expert in real estate, title, taxes and trust administration. It means assembling the right people, asking the right questions, and making thoughtful decisions with good information.

That’s where I can help.

Feeling overwhelmed by the house itself?
If you’re wondering what to do with the belongings, where to start, or how to begin preparing a parent’s home, you may also find Where Do I Even Begin? A Guide to Selling a Parent’s Home helpful.

— Janey Bishop
Independent Real Estate Broker
DRE #01838769