A beneficiary that you’re acting on behalf of has been left a property that they want to sell, it can be a tricky world to navigate. We’ve gone through everything you need to know about selling a house that’s in a trust.
What is a trustee?
A trustee is the person who is responsible for managing a beneficiary’s assets that have been left in a trust. Everything a trustee does needs to be to the benefit of the beneficiary, the trust itself might also detail what you are to do with the money or assets or it could be a discretionary trust meaning the trustee has more freedom with the assets.
It’s a lot of responsibility, a legal responsibility, to be a trustee. You generally become a trustee if the beneficiary is to young to manage the asset themselves, is an older person who needs to pay for care or has a disability or impairment that means they can’t manage the assets.
Acting in beneficiary’s interests
In 1996 an act was introduced, the TLATA, which meant that trustees no longer have a duty to sell meaning beneficiaries can occupy the property or sell, whichever they wish.
The trustee always has to act on behalf of the beneficiary and within the general interest of the trust. Although the trustee can act on behalf of the beneficiary as they see fit, the trust deed may state that they have to consult the beneficiaries in order to exercise some specific things, such as selling a property.
Any proceed made by the sale will also fall under the terms of the trust meaning they may still be controlled by the trustee.
There are two types of guarantees you can sell with as a trustee.
A limited title guarantee means that the seller of the property has no personal knowledge of the sale itself and therefore a full guarantee cannot be given to the seller. This is quite important as its likely that the trustee may have never visited the property and might have little knowledge of any matters in relation to the title. This is something that needs to be clear at the outset of the transaction so the buyer’s solicitors are aware.
A full title guarantee can be given if the seller has given the right to sell the property, and this is the typical way in which a property is sold.
How to sell a home in a trust
For the most part selling a home that is in a trust isn’t too dissimilar from selling a property normally, here is an idea of the steps:
- The documents need to be verified to ensure the trustee can act on behalf of the beneficiary to sell the property, if nothing is stated in the trust deed, it’s usually implied that they have the power.
- The trustee needs to decide how to sell the home, whatever way that is, whether its through an estate agent, auction or sell house fast company such as ourselves, they’ll want to see the documents to confirm this.
- You’ll need to provide proof to the title company that the trust is valid. You may also need a few additional documents & the involvement of a solicitor.
- Sell the home, which requires the trustees signature. As we’ve mentioned any proceeds will go into the trust which may be distributed how they see fit, or in accordance with anything outlined in the trust.
It can be a fairly confusing topic, so if you are still confused, we are happy to help talk you through it & understand as to whether you have the right to sell. All you have to do is get in touch with us, you can either phone 0800 024 8444 or you can go through our get an offer process and explain to us in detail the issue.