A trust can hold title to real estate, and the deed names the trustee as the owner for the benefit of the trust. When a trust buys or sells, the closing team verifies the trust exists, the trustee has authority, and the deed and title policy reflect the correct trust and trustee names.

How a Trust Holds Title

The deed to a trust names the trustee, typically in a form like "John Smith, trustee of the Smith Family Trust dated January 1, 2020." The trust itself is not a person or a legal entity in the way an LLC is; the trustee holds the title and acts for the trust. The trust agreement defines who the trustee is and what powers they have.

  • The trustee signs documents for the trust.
  • The trust agreement governs authority and successor trustees.
  • Vesting should match the trust name and date exactly.

Revocable vs. Irrevocable Trusts

A revocable trust, often called a living trust, can be amended or revoked by the grantor, and the grantor often serves as trustee. An irrevocable trust generally cannot be changed without beneficiary consent or court involvement. The distinction matters to lenders and to the title and escrow team because the authority to act differs.

  • Revocable trusts are common for estate planning and often hold the grantor's home.
  • Irrevocable trusts are used for asset protection and other planning goals.
  • Lenders have specific rules about which trusts can hold mortgaged property.

What Title and Escrow Need From a Trust

The closing team typically needs the trust agreement, or a certification of trust that summarizes the relevant provisions without exposing the full document, plus identification of the trustee. Requirements vary by state and underwriter. When the trustee has changed, the closing team needs to see the chain of trustee appointments.

  • Certification of trust or relevant pages of the trust agreement.
  • Proof the current trustee is serving.
  • Documentation of successor trustee appointments if the original trustee is gone.

Financing Property Held in a Trust

Lenders have their own rules about trusts. Many allow a revocable trust to hold title if the grantor occupies the property and certain provisions are met. Some lenders require the loan in an individual's name with the property vested in the individual, or they require specific trust language. The closing team coordinates the vesting with the lender's approval.

  • Ask the lender about its trust ownership requirements before closing.
  • Confirm the vesting the lender approves matches the deed.
  • Some lenders require the trust agreement to include specific mortgage clauses.

Selling Property Out of a Trust

When a trust sells, the trustee signs the deed, and the closing team verifies the trustee's authority and the trust's current status. If the grantor has died, the successor trustee steps in, and the closing may involve additional steps depending on state law. An attorney should guide trust administration when a grantor has passed away.

  • Confirm who is the current trustee before contracting to sell.
  • Have the certification of trust ready for the closing team.
  • If the grantor died, consult the attorney handling the trust administration.

The Bottom Line for Investors

Trust ownership is an estate planning choice with real consequences for how title is held and transferred. The title and escrow team makes sure the trust, the trustee, and the deed all line up. The decision to use a trust, and the trust's terms, are questions for your attorney and tax professional.

  • Send the certification of trust to title early.
  • Use the Investor Closing Cost Estimator to plan costs.
  • Read the guide on probate and inherited property if you are dealing with a deceased owner's trust.