While the trust may be entitled to ownership of the real estate by will or contract, it is not the legal owner of the property until such property is conveyed by deed. Whether the property can be sold absent this hurdle really depends on the prior owner and the agreement of the trustee, subject to the limitations of a trust.
For example, if the residuary clause of a "pour over" will creates or distributes property to the trust, without specification, the Executor usually has the ability to sell the real estate and put the proceeds in trust with court approval that is generally granted. Even if the will specified the contribution of the parcel of property, if the trust is not established to hold the property for family and does not mandate that it be held as an investment, most trusts would allow the trustee to agree to accept proceeds of sale in lieu of the property. Depending on the terms of the trust, beneficiary agreement might be required. The same is true if someone has contracted to provide the property to the trust. Absent any of these obligations, it is exclusively withing the right of the original owner whether to sell it him/herself or to make the trust do it.
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If the deed is to be part of the trust in needs to be titled as such with the recorder of deeds office. Otherwise the current owner is the grantor on the deed that effectuates the sale.
It is hard to say based on your facts whether the property must be placed into the trust first before the sale. If there is a will with a pourover provision to the trust, a review of the will and trust would need to take place by estate counsel to get a definitive answer. It may be that the property could be sold by the estate with the proceeds going into the trust, but without a read of the documents no one can proviede you a definitive answer.
Hope this helps.
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As a matter of Massachusetts law, you cannot sell what you do not own. If you want a trust to own a piece of real estate, you must transfer the property by deed of the XYZ trust and record the deed and a trustee's certificate documenting that the trust exists, who the trustee is, and that the trustee has various rights concerning the real estate. (Note -- we don't need to record the trust any more.) If the trustee does not have the right granted by the Declaration of Trust, then he can't sell the property.
E. Alexandra "Sasha" Golden is a Massachusetts lawyer. All answers are based on Massachusetts law. All answers are for educational purposes and no attorney-client relationship is formed by providing an answer to a question.
Trustees hold legal title to the property of the trust for the benefit of the trust beneficiaries. This means that the trustees might not personally benefit from the trust but any buyer, insurer or financial institution dealing with the trust concerning the trust assets must deal (have signatures from) the trustee(s). Generally a deed transferring property to a trust names the serving trustees as owners in their capacity as trustee. "I transfer to George Smith, trustee of the Smith FamilyTrust, dated xxxx". The deed is recorded in the appropriate registry so that there is no confusion as to title. In Massachusetts, a trustee must also file a Trustee's Certification that the trust document grants the trustee authority to hold and sell real property, or the trust itself must be entered into the real estate record.
When it comes time to sell, the trustee(s) sign the deed on behalf of the trust, again in their capacity as trustee; "George Smith, trustee of the Smith Family Trust, dated xxxx, for consideration of Xxxx transfers to Jane Jones..." or similar language. The point here is that title must first reside in the trust, through it's trustees, then the trust, again through its trustees, can pass title to a third party.
If you are a trustee, or are buying property from trust, you should discuss obtaining title insurance with your real estate attorney.
Hope this helps.
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