Thirty years behind a title desk teaches you that the most common legal questions aren’t the complicated ones. They’re the ones everyone assumes they already know the answer to — until they’re suddenly facing a closing and realize they don’t.
Homes held in revocable living trusts generate more questions at closing than almost any other title situation. Here are the ones I answer most often, and the answers I give.
“Wait, Is the Trust Going to Cause Problems at Closing?”
This is usually the first question from a buyer or seller who discovers that the home they’re dealing with is held in a trust. The answer, in almost every case, is no.
Title companies handle trust-held properties routinely. The additional documentation needed is minimal: we need a copy of the trust or a certificate of trust (a short summary document that proves the trust exists and identifies the trustee’s authority). We need the trustee’s identification. And we need the deed to transfer title in the trust’s name, signed by the trustee in their capacity as trustee.
Closing takes a few extra minutes to review the documents, but the transaction itself is straightforward.
“Can the Trustee Actually Sell the Property?”
Yes, assuming the trust gives them that authority — which virtually every properly drafted revocable trust does. The certificate of trust or the trust document itself will spell out the trustee’s powers. Title companies verify this as part of the closing process.
For revocable trusts where the grantor is also the trustee (the typical setup during the grantor’s lifetime), the trustee has essentially unrestricted authority over the trust assets. They can sell, mortgage, lease, or transfer as they see fit.
For successor trustees who take over after the grantor’s death or incapacity, authority is the same, but title companies tend to scrutinize the trust document more carefully to ensure the successor trustee has properly taken over.
“Does the Trust Own the Property, or Does the Trustee Own It?”
This question comes up all the time, and the honest answer is: the trustee is the legal owner, but holds the property for the benefit of the trust’s beneficiaries. Understanding who owns the property in a revocable trust is one of those foundational concepts that trips up even real estate professionals who haven’t dealt with trust transactions before.
For practical purposes, the deed shows the trustee’s name in their capacity as trustee. The property tax bill can go to either the trustee or the trust’s mailing address (often the same thing during the grantor’s lifetime). Insurance policies typically name both the trust and the trustee.
“Do I Need Title Insurance Differently on a Trust-Held Property?”
No. Title insurance for a trust-held property functions identically to insurance on any other property. The policy insures the title as held by the trust. If the property is later transferred to a beneficiary, the original policy may not cover the new owner — they may need to purchase their own owner’s policy at that point.
One tip for buyers purchasing from a trust: always confirm the seller’s policy of title insurance is still in place and that there are no exceptions related to the trust itself. A good title company will flag anything unusual during the commitment stage.
“What Happens If the Trustee Dies Mid-Transaction?”
This is more common than you’d think. An older seller in their 80s lists the home, goes under contract, and passes away before closing. What happens?
The beauty of a revocable living trust is that the successor trustee immediately takes over without court involvement. They step into the role, can sign documents as trustee, and can close the transaction typically without any delay beyond the time needed to produce a death certificate and document the trustee succession.
Compare this to a non-trust situation, where the death of the seller mid-transaction typically throws everything into probate, delaying closing by months or cancelling the deal entirely. The trust protects the transaction.
“Do I Need to Deed the Property Back to Myself to Sell It?”
No. This is a myth that circulates among some real estate professionals. You do not need to deed the property back to yourself before selling. The trustee can sell directly from the trust. Doing the extra step of deeding it out of the trust and then selling creates unnecessary paperwork, potential transfer tax issues in some jurisdictions, and lost probate protection between the deed-out date and the sale date.
Just sell it from the trust. It’s cleaner.
“What About Mortgages?”
Most residential lenders handle trust-held properties without issue, but the loan documents may require minor modifications. Some lenders require the trustee to also sign personally in their individual capacity (creating personal liability). Others will lend to the trust without personal liability. Commercial lenders often handle this more easily than retail banks.
For refinancing, most lenders will deed the property out of the trust temporarily to complete the refinance, then deed it back in. This is a routine process but worth confirming with the title company beforehand.
The Quick Summary for Homeowners
If you own a home in a revocable trust, your ability to sell, refinance, and generally deal with the property is essentially unchanged from individual ownership. The main thing to remember is that all documents need to be signed in your capacity as trustee, not individually. Your title company will walk you through the paperwork at closing.
For homeowners considering putting their home into a trust in the first place, talk to a qualified estate planning attorney. The structural issues and protections are well-understood, and the transaction mechanics (from my desk) work smoothly when the documents are properly drafted.
