Selling a home you own tends to be a straightforward process. However if the home you want to sell is in a trust you may experience a few road bumps and a different selling process than what you may be used to.
In short, you must have the correct legal permissions to sell a home you have inherited in a trust.
What Kind Of Trust Do You Have?
To start, a trust is part of estate planning, an important part of managing an individual’s estate as they age, become ill, or otherwise disabled. The ability to sell a home in a trust depends on the trust and status of the grantor so make sure that you have the power to sell the property.
There are several types of trust, two of which we will briefly mention here—a revocable living trust, and an irrevocable trust.
Revocable Living Trust
In a revocable living trust, a beneficiary cannot sell a home outright. This is because the grantor still owns the property, even if you are living in the home. Only after the death of the grantor does the property transfer to a beneficiary. Then you should be able to sell the home as you would normally would, provided all of the legal documents are in order.
Irrevocable Trust
If the trust is an irrevocable trust the terms cannot be modified, amended or terminated without the permission of the grantor’s beneficiary. In this case, the grantor has transferred their ownership of their assets to the trust, removing their legal right of ownership to the assets and the trust.
Before Putting The Home On The Market
Before putting your home on the market, you will need to show a copy of the trust documents to the title company. This will help you ensure a mortgage and that you have a clear title and right to sell the property.
You also need to ask yourself if repairs or updates need to be made before the home is put on the market. If the home is in significant need of repairs and updates you may have trouble finding a buyer.
If you do sell the home you inherited from a trust, remember that you are responsible for paying the capital gains tax on the proceeds.
The process of selling a home you have inherited in a trust can be an arduous process that must be done with the guidance of a real estate agent and attorney. At Merchant of Homes, our experienced agents are here to help guide you through the process of selling a home with peace of mind.