Underwriting Q&A: The Grantor in the proposed insured transaction is a Trust. How does the Deed have to be prepared so that a title insurance policy can be issued?

Question: The Grantor in the proposed insured transaction is a Trust. How does the Deed have to be prepared so that a title insurance policy can be issued?  

Answer:    

Trusts establish a relationship between a person holding in interest in a property for the benefit of another person. The person who holds the interest is referred to as a Trustee. The document that defines the powers of the Trustee is called the Trust; and the person(s) receiving the benefit is the Beneficiary.

In most states, and specifically Texas, Florida, Arizona and New Mexico, a Trust cannot hold legal title to real property. To properly vest tile, the property must be granted to the Trustee in its capacity under the Trust. By way of example – the correct way to vest title would be, Ross Geller, Trustee of the Rachel Green Revocable Trust. A Deed to The Rachel Green Revocable Trust would not be a valid conveyance.

When insuring title to property with a Trust, the Agent must review the Trust to verity that the Trustee has the powers necessary under the Trust to hold title. Additional Deed requirements vary from state, such as including the date of the Trust and address of the Trustee on the Deed. For any questions regarding state specific requirements, the Agent is welcome to contact the Underwriting Team.