TRUST REAL ESTATE SALES IN
CALIFORNIA
The primary goal of any trust is to protect
the assets within and to provide directives as to what happens and when. There
are many different types of trusts, and each has its intricacies, particularly
when real estate is involved. When we are talking about trust sales, it simply
means the sale of property (real estate) that happens within the legal
constructs of a trust.
WHAT IS A TRUST IN CALIFORNIA?
A Trust is a legal document that creates an
entity. It has 3 important positions within it.
1
The
first is the grantor -the person that is giving assets to be placed
inside the trust.
2
The
assets are managed by the trustee – this is the person that responsibility of
ensuring a grantor's assets are used the way they intended them to be.
3 The
Beneficiary of trust is the individual or group of individuals for whom a trust was
created. The Trust can have many different types of assets that go into it,
from real property, insurance, asset and savings accounts or most any object of
value.
A trust real estate sale is the process of
selling real property that is within a trust. It is similar to a typical real
estate transaction where there is a real estate broker involved, marketing of
the property, negotiations with the buyer and a closing with escrow and title
companies. However, there are several additional documents and disclosures
needed for these specific sales. Having the added level of specialized knowledge
of conducting the process of a trust sale and the increased documentation
required is essential for a smooth transaction.
In the absence of a trust the property will
go through probate upon death of the owner. Putting real property inside a
trust will eliminate it from going through the probate process which can take
from 6 to 14 months, is expensive and public.
TRUST VS PROBATE SALE
The most significant difference between a trust real
estate sale and a probate sale is whether there is involvement from the court.
The trust allows for the sale of real property without any involvement from the
court, provided the instructions from the trust document are followed.
On the other hand,
a probate real estate sale does require the court’s involvement. In California,
how far reaching that court’s involvement will be will depend on whether the
estate’s representative is granted full authority under the Independent
Administration of Estates Act
The importance of having a well-crafted trust document is
that it will delineate all the details and directions of what to do with the
assets at all times, leaving no loose strings that can create conflict between
the beneficiaries or between the trustee and the beneficiaries. Because trust
real estate sales are much more precise, the process is shorter than a probate
property sale.
Generally, a probate sale will yield less on the sale
than a trust real estate sale unless you decide to go with a highly skilled
brokerage firm that specializes in these particular types of sales.
Finally, California has different tax implications for
the sale of real estate, depending on whether it is a probate or a trust sale. All
parties should always consult with a attorney or CPA when drafting a trust as
there are tax and estate planning implications involved.
DO YOU NEED TO HAVE COURT CONFIMATION TO HAVE A TRUST SALE?
The good news is that a trust real estate sale in
California does not require court confirmation. This means that the court does
not have to supervise the sale of the property so long as the trust is drafted
correctly, the trustee can move ahead with the sale with the help of a trust and
probate specialized broker for the best results and highest proceeds. The time
frame to complete a trust sale is substantially shortened versus the timeline
on a probate sale.
WHY YOU NEED A TRUST REAL ESTATE AGENT?
The decision to sell with a specialized trust real estate
agent regardless of whether the sale of the real property happens during the grantors
life or after the grantor has passed and is in the hands of a trustee. A
probate or trust real estate sale is more intricate than a regular market sale.
It would be most beneficial to the trust to use a real estate broker with local
real estate knowledge and the experience to handle such transactions.
The Matt Horn Group, with over 33 years of real estate
sales experience and hundreds of satisfied clients, have a high level of
expertise in probate and trust transactions. They have the confidence and
resources to guide and advise their clients through these more complex real
estate trust transactions.