Understanding Living Trusts and Title Insurance Requirements

In today’s world of busy probate courts and rising estate taxes, living trusts have become a popular way to hold title to real property. If you're transferring property into a trust, or dealing with property already held in a trust, it's important to understand how title insurance companies handle such situations.

What is a trust?A trust is an agreement between a trustor (the person creating the trust) and a trustee (the person managing the trust) in which the trustee holds and administers certain assets for the benefit of designated beneficiaries.

Can a trust itself own property?No, the trust itself is not a legal entity that can hold title. Only the trustee, acting on behalf of the trust, can own or convey real estate. The trustee’s authority is limited to what is explicitly outlined in the trust agreement.

What does the title company require when a trustee holds title to a property?The title company will typically ask for a Certification of Trust, which should include:

• The date the trust was executed
• Names of the trustor and trustee
• Trustee's powers and authority
• Who can revoke the trust (if applicable)
• Signature authority of the trustees
• How the title should be held
• Legal description of any property held by the trust
• A declaration that the trust has not been altered in a way that invalidates the certification, and that it is signed by all currently acting trustees

Can private financial details in the trust be withheld?

Not entirely. While you may not want to disclose charitable donations or financial distributions, those sections often appear on the same pages as key legal provisions. If a full copy of the trust is required, the title company may allow you to redact specific dollar amounts, but not entire pages.

If there are multiple trustees, can one sign on behalf of all?

Only if the trust specifically authorizes one trustee to act alone. Otherwise, all trustees must sign.

Can a trustee delegate authority using a power of attorney?

Yes, but only if the trust document explicitly allows the trustee to appoint an attorney-in-fact.

What happens if all trustees are deceased or unwilling to serve?

If the trustor is still alive and the trust allows them to appoint a new trustee, they may do so. If not, the court will typically appoint a successor trustee.

How is a trustee’s signature acknowledged by a notary?

The notarial acknowledgment must reflect that the person is signing in the capacity of trustee. For example, if an individual is the trustee, the form will indicate that they are signing on behalf of the trust.

What does a typical deed into a trust look like?

A standard deed transferring title to a trustee might be worded as:“John Doe and Mary Doe, as trustees of the Doe Family Trust, under declaration of trust dated January 1, 1992.”

Are there limits to what a trustee can do?

Yes. Trustees must operate strictly within the authority granted by the trust. However, unless the trust specifically limits certain actions, the probate code generally provides broad powers for trustees to sell, convey, or refinance trust property—powers that are usually sufficient for title insurers to rely upon.