How Should a Trustee Sign?

By Phil M. Fowler

Serving as a trustee is a purely legal role where you own legal title or have limited legal authority, subject at all times to the terms of the underlying trust agreement. When you sign documents in your capacity as a trustee, it is a good idea to always include the designation "as trustee" after your signature. Using the "as trustee" designation helps you and others keep your trustee role legally distinct from your personal affairs.

Legal Title

A trustee is a person whose name appears on the legal title to property held in the trust. For instance, if the trust includes real estate property, the deed to that property will identify the trustee as the grantee, or current owner, of the property. However, a trustee only has legal title because the trustee's title is always subject to the provisions in the underlying trust agreement. The beneficiaries identified in that trust agreement own equitable title to the trust property. Equitable title includes the right to all benefits from the property.

Notice

When a trustee signs a document without including the designation "as trustee," the trustee provides no notice of the trustee's limited legal capacity in that transaction. On the other hand, including the designation "as trustee" puts the entire world on notice that the signer of the document is acting in a limited legal capacity and not personally involved in the transaction.

Protect your loved ones. Start My Estate Plan

Effect

If a trustee signs a document with the intent to act in her capacity as trustee, but without including any designation of "as trustee" next to her signature, the trustee may unintentionally become personally involved in the transaction. For example, if the trustee intends to enter into a mortgage loan agreement on behalf of the trust, but she fails to designate her signature as a trustee's signature, then she may be held personally liable for the balance due on the mortgage loan.

Additional Information

Some states' laws require a trustee to include information identifying the trust, in addition to including the simple designation "as trustee." For example, state law may require the trustee to include after his signature a phrase similar to "as trustee of the XYZ Family Living Trust Dated March 1, 2012."

Protect your loved ones. Start My Estate Plan
What Is the Difference Between Warranty Deed & Trustee Deed?
 

References

Related articles

How to Execute a Living Trust

A living trust allows a person known as a trust grantor to place his assets under the administration of a trustee, who then distributes these assets to trust beneficiaries as instructed by the grantor in the trust deed. The main advantage of a living trust is that since it is prepared while the grantor is still alive, it allows the grantor's property to pass to his beneficiaries, both before and after his death, without the expense and delays of probate. The administration of a living trust involves challenges, responsibilities and potential legal liability.

Transferring Property From a Living Trust to a Successor Trustee

A successor trustee is named in a living trust as the person who will take over the trustee’s duties and fulfill provisions of the trust when the trustee dies. The transition process requires trust property to be transferred out of the trustee's name into the successor trustee's name. To do this, the successor trustee must review the trust document and prepare the necessary transfer documents for each type of property held in the trust.

How to Transfer a Mortgage to a Living Trust

You and your spouse may have decided to form a living trust, via a trust agreement, to hold your real property or other assets. If you are the mortgagee, or holder of an existing mortgage made by someone else to you, you may desire to transfer that mortgage into your trust as an asset. It may be much more difficult, however, to obtain consent from a lender to transfer a liability, such as a mortgage from a bank or other lending institution, into the trust because it ceases to be an individual liability and becomes a liability of the trust.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help. Wills & Trusts

Related articles

How to Transfer a Trust Deed to a Guardian Conservator

When a trust dissolves due to some mitigating event, such as the death of the trust’s creator, known as the “settlor,” ...

How to Sign Documents As a Successor Trustee of a Living Trust

A living trust is a common document in estate planning that provides for an orderly transfer of property without having ...

Why Does a Power of Attorney Not Transfer to a Trustee?

A power of attorney and a trust document are similar in that they both convey to an individual the authority to manage ...

How to Fund a Living Trust With Royalties

A royalty is the right to receive financial compensation for a body of work that is used by a third party. Common ...

Browse by category
Ready to Begin? GET STARTED