Trust Sales – Boulder CO Real Estate Agent
It is important to premise this page by reiterating that what follows is not legal advice and should not be construed as such; it is intended for only for educational purposes and to acquaint the reader with some of the concepts that may come up when selling real property owned in the name of a trust. For information specific to your circumstances it is always advised that you seek legal counsel.
It is important to have some theoretical background when discussing trusts in the real estate setting. To start off, we need to know what a trust is. Simply put, a trust is a fiduciary relationship (more on this later), usually evidenced by a trust document. A trust is more akin to a marriage than to a business entity like an LLC or corporation. Strictly speaking trusts are not legal entities according to the law, although they are often treated as though they are under various Colorado and federal statutes.
You might wonder who the parties to such a relationship would be. There are three parties to every trust relationship. The first party is known as the settlor or trustor. Simply put, the settlor is the person who creates the trust by signing the trust document and, usually, funding the trust by titling property in the trust’s name. The second party is the trustee, who administers the trust. The third party is the beneficiary, who receives the benefits of the trust. These three parties can all be the same person in what’s called a “grantor trust.”
What do trusts have to do with real estate? Many people in Boulder County and across Colorado own their property in the name of their trust. Usually the trusts are created as grantor trusts, which means that the person who established the trust is the same person administering the trust and benefiting from the trust. Usually these grantor trusts are deemed revocable living trusts (a/k/a living trusts) and are named accordingly (e.g., The Disco Stu Revocable Living Trust, dated 12/14/1977).
Under Colorado law, the way a property is titled when held in trust is important. Generally speaking the name of the trustee should not be included when titling a property in the name of a trust. This is because there are various statutory legal implications under the Colorado Revised Statutes when the name of a trustee is included that can lead to unnecessary complexity. Also, it can be confusing to include the trustee’s name on the deed because when the trustee changes, as will happen with any trust that is not revoked prior to the settlor’s death, the name of the trustee stated on the deed will be incorrect, potentially leading to confusion among the various parties involved in any given real estate transaction.
Trusts are usually estate planning vehicles. Trusts are primarily used as a means of avoiding a process called “probate” in which a Colorado probate court with jurisdiction over a given deceased person’s property appoints a “personal representative” to administer that deceased person’s estate. Probate is the process that arises when property is not titled in the name of a trust. When property is titled in the name of the trust, various circumstances, including incapacity and death of the initial trustee (who is usually also the settlor and primary beneficiary), can trigger the successor trustee to become the primary trustee responsible for administering the terms of the trust. It happens automatically upon the occurrence of some given event, without the need for the Colorado probate court with jurisdiction over the deceased person’s primary residence to appoint a personal representative and issue letters testamentary. However, Colorado law requires that once a trust become irrevocable it must be registered with the probate court with jurisdiction over the deceased person’s estate.
The terms of a trust will often allow for the sale of the trust property and distribution of the proceeds of the sale to the trust’s beneficiaries. If you are the trustee of a trust that has recently become irrevocable due to the death or incapacity of the grantor, you Boulder trust sale real estate broker Ashley Newell at Royal Arch Real Estate has the knowledge and experience to make the sale of any real estate owned by the trust, whether it be vacant land, residential or even commercial, go as smoothly as possible.
If you are looking for Boulder real estate agents with a results oriented approach tailored to your specific needs, contact Royal Arch Real Estate. We are knowledgeable and experienced brokers who always have your best interests at the forefront of our minds, whether you are buying or selling a home, vacant land or a new construction.