Trust Sales

Trust Sales

Often times a property is being sold by the heirs after their parents (or other loved ones or friends) have passed. Typically, a Family member or very close friend is named as the Successor Trustee. This type of sale requires specific expertise that most agents do not have (they simply do not handle many of this type of transaction). The issues that often come up in this type of sale are quite different than a standard Real Estate Transaction; the majority of Agents have little or no experience with them.

Title to the property is held in the name of the Trust; however, it is the Sucessor Trustee who will be making decisions and signing on behalf of the Trust. The Trustee’s legal standing needs to be confirmed by Title. This Title issue and several other things that come up which are unique to Sales of Property in Trust are handled quickly and in advance by Rick & Sandee.

While these transactions are less complicated than Probate sales or sales involving a Guardian, there are many pitfalls that the Sellers (Trustee) and their Agent need be aware of. It is critical that the Agent, Successor Trustee and the Attorney all to work together on behalf of the Estate and the heirs.

Value at the time of death

The value of the property at the time of the death of the owner is important because the IRS grants a “Stepped Up Basis” to the property. This means that the basis, as it relates to Capital Gain Tax on the property, is moved up to the value of the property when the owner passed. This greatly reduces the chance the heirs will have to pay Capital Gain tax after the sale.

The value is typically established by a licensed Appraiser, usually within 30 days of death. If that has not been done, or if it has been years since the date of death, we can provide a Broker Price Opinion of Value, going back as far as 20 years, at no charge to the Estate. Or if preferred, we provide a referral to a licensed Appraiser with extensive experience in Values at Time of Death.

Of course, as with all tax matters, consult a Tax Professional before making any decisions.

Entity Sellers 

The Successor Trustee will be signing all documents on behalf of the Trust. This includes the Residential Listing Agreement and the CAR Residential Purchase Agreement and Escrow Instructions. On both of these documents, there is a specific disclosure regarding Entity Seller (Signing on behalf of a Trust, Estate, LLC, partnership etc...). The Full Name of the Trust (or Probate, including Case #) is added and the person signing on behalf of the Entity is listed along with their Title.

This section discloses to all parties that the signor is in fact signing on behalf of the Trust or Estate and has legal authority to do so.