A trust agreement, the governing document for a trust estate in Tennessee, establishes the trust, names the trustees, or persons authorized to manage its assets, and sets out their powers. It also designates the beneficiaries and how assets should be distributed. A grantor, or maker of a trust, may choose only to provide an abstract of trust, also known as a certificate of trust -- a scaled-down version of the agreement -- to a closing attorney, title company or other business entity requiring proof of trust-related matters.
The creator of a trust may prefer to keep certain trust matters private and confidential. Since his trust often establishes who will acquire its assets upon his death, he may be hesitant to publicize a copy of the trust while living. The desire for privacy, among other issues, prompted some states, including Tennessee, to enact laws that allow businesses to accept the facts contained within a properly prepared trust abstract, or certificate, without being held liable for failing to review a full copy of a trust agreement. A trust abstract is not required to disclose the names of a trust's beneficiaries.
A trustee is the individual who signs documents and represents the trust when dealing with financial institutions, title companies or other businesses on its behalf. Because one or more trustees may be named to manage a trust's assets, proof of the identity of the current or acting trustees and their powers to act are of utmost importance. The abstract of trust should set out the names of the trustees, including successor trustees, and detail the powers and actions which they are authorized to perform. In the case of co-trustees, the abstract should state whether one or both are required to sign documents to bind the trust. Generally speaking, a successor trustee is authorized to act when the initial trustee has been removed, has resigned or has died.
Other Required Information
The full name of the trust, the names of the settlors or creators of the trust, how property held by the trust will be titled and the date the trust was created are pertinent facts that should be included in the abstract. If needed for a specific transaction, such as a real estate sale where a 1099 is required, the trust's tax identification number should also be included.
No Amendments or Changes
The abstract should include a statement that the trust has not been revoked or amended in a manner that would cause the facts set out in the trust abstract to be false or incorrect. If the original trust has been amended, the abstract should reflect the results of that amendment, so that the information contained therein is current and reliable.