A trust is a legal structure that forms an independent entity. It contains three key roles:
The Settlor - the individual who transfers assets into the trust.
The Trustee - the person responsible for managing the assets within the trust.
The Beneficiaries- those who receive the benefits and income from the trust assets. This can be a single person or multiple people.
The settlor places assets into the trust to be supervised by the trustee for the benefit of the beneficiaries according to the terms of the trust document.
Selling real estate held in a trust follows a similar process to a typical property sale, but with some key differences. Like a regular sale, there is listing, a broker, negotiations, and closing. However, conducting the sale through a trust adds complex legal requirements around the trust structure, extended timelines, and more documentation.
Without a trust, property goes through probate when the owner dies, often selling for less. Trusts avoid probate, benefiting heirs. Trust sales handled properly by knowledgeable brokers typically yield higher sale prices, maximizing value for beneficiaries.
Trust asset rules vary somewhat by state. In revocable trusts, the grantor can sell property freely since they still own it. They can sell from within or outside the trust. Irrevocable trusts are more rigid since changes require beneficiary approval. After the grantor dies, all trust types become irrevocable. The trustee must then follow trust directives to benefit beneficiaries.
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