Real Estate Q & A: Why a trust doesn’t always avoid probate for real estate

Adam D. Martinez | Chairman of Real Estate Litigation Department

Question:  My parents owned a few investment properties before they passed away. They created a trust so that I would not have to go through probate. They even gave me a copy of the trust which states that the investment properties are part of the trust. However, I just signed a contract to sell one of the properties and the title company handling the transaction told me that I will need to do a probate because the property is not in the trust. I don’t understand how this happened. Will I still be able to sell the property?

Answer:  Many people assume that just because they create a trust, they do not need to take any further action. This is not true. After it is created, the owners must transfer their property to the trust. This process is usually referred to as “funding” the trust. For real estate, the owners need to sign a deed transferring the real estate from themselves to the trust. Therefore, if your parents only created the trust, but never executed the proper deeds, the properties are still in the name of your parents. This is likely the reason for the title company’s position.

You should still be able to sell the property without any problem or delays. Depending on how many heirs there are and the contents of any wills, you may need some additional documents signed. Opening a probate for the purpose of selling or transferring real estate is common and is not usually complicated or expensive.

Adam Martinez is the Chairman of the Real Estate Litigation Department at Rose Law Group pc. and can be reached at amartinez@roselawgroup.com.

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