What Can a Trustee Do on the House When a Person Dies?

By Cindy DeRuyter, J.D.

What Can a Trustee Do on the House When a Person Dies?

By Cindy DeRuyter, J.D.

Generally speaking, a trustee, the person in charge of a trust, has authority to sell, transfer, or otherwise convey real estate to the beneficiaries, although the creator, called the grantor, may have provided specific instructions or limited this individual's powers in some way. Trusts—revocable or irrevocable—are popular estate planning tools. When the grantor transfers real estate into one, the person in charge of the estate manages real estate and other assets according to its terms. After the death of the grantor, this individual must follow the terms of the agreement.

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Maintaining and Retaining Real Estate

Trustees are responsible for safeguarding and protecting assets, including real estate. In some cases, a grantor wants their trust to continue owning real estate and other assets even after the grantor's death.

If the agreement includes such provisions, the trustee's job is to maintain the property for the beneficiaries. This typically includes using assets to pay real estate taxes and insurance and to pay for upkeep and maintenance for the home.

Transferring Title to Beneficiaries

Trust agreements sometimes include specific instructions directing the person in charge of the assets to distribute real estate to one or more of the beneficiaries. In this case, this person's role is to transfer a title by preparing and recording a deed, such as a warranty deed or a quit claim deed, with the County Recorder or Registrar of Title.

The trustee usually uses assets to pay for any related recording fees, deed taxes, and other expenses associated with the title transfer, unless the agreement says otherwise.

Preparing and Selling the Property

If the trust agreement does not specify that the trustee should retain or transfer title after the grantor's death, the individual might be responsible for preparing the home for sale and selling it on behalf of the document. They owe a fiduciary duty to the beneficiaries, meaning they must act responsibly and in the beneficiaries' best interests. If it is reasonable to do so under the circumstances, the person in charge of the trust can sell the home.

Generally, the trustee uses trust assets as necessary to fix or improve the home in order to obtain a fair price for it. When the sale is complete and the trust has satisfied all of its obligations, they distributes sales proceeds to the beneficiaries as directed in the agreement.

Trustees usually have broad authority to manage real estate owned by the trusts they manage. However, their powers can be limited and the grantor may have provided specific instructions for managing and distributing their home. If you are managing a trust for someone else and have questions about your authority under the agreement, consult with an estate and trusts attorney licensed to practice law in your state. When in doubt, review the agreement carefully.

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