A trust is a financial structure that can on assets separate from individual ownership. Assets are placed inside the trust and at least one Trustee is named to manage the trust assets aptly. The Trustee has a duty to serve in the trust’s interests and fulfill any conditions defined when the trust was formed. The trust beneficiaries are those paid or benefited by the trust assets. One common example is an inheritance trust in which wealthy parents leave a trusted friend or financial advisor as the Trustee of a trust designed to pay their children an income or dispense specific inherited assets without the hassle of probate.
It is very common to place homes and properties inside the trust for a number of reasons. Properties in a trust can be handled in a more business-like manner and they also avoid the management delay of probate should the homeowner pass away. Of course, under California law, selling a home inside a trust can be a challenging situation. It helps to understand how the trustee/beneficiary control of trust property works along with how to sell a trust home for the benefit of the overall trust assets or for the beneficiaries themselves.
TRUSTEES SELLING A HOUSE IN THE TRUST
When a house is inside a trust, the most likely person to sell is the trustee. Trustees are often charged with maintaining the trust assets and growing the value of the trust. The trustee has the discretion to sell a house fast inside the trust as long as it is not a specific gift to a beneficiary or disadvantageous to the trust itself.
THE FREEDOM TO SELL
If you are the trustee of a trust that includes residential property, you can usually choose to sell it to benefit the trust. This can include a specific house or a collection of residential investment properties. Be sure to check the terms of your trust, intended specific gifts, and weigh the choice to sell on the benefit to the trust assets as a whole.
OBLIGATION TO THE TRUST
Trustees have freedom to act with trust assets, but only within their obligation to the trust and the trust beneficiaries as they are intended to be benefitted.
TRUST BENEFICIARIES SELLING A HOUSE FROM THE TRUST
Trust beneficiaries rarely have full control over trust assets, as many trusts are designed to separate the controlling trustee and beneficiary roles. This is both to protect trust assets with a neutral managing party and to ensure that beneficiaries are not saddled with the burden of trust management -especially if beneficiaries are minors when the trust is formed.
However, if you are a beneficiary and receive a home as a specific gift, then you can choose to sell the property out of the trust assets.
GIFTED HOUSE FROM A TRUST
A house in the trust assets usually serves as value that is then provided in a structured way to the beneficiary. But you can also receive the house as a specific gift from the trust or trust originating documents. When a home is given as a specific gift, the trustee must transfer the title and the beneficiary becomes the legal owner. Even if the house is still officially inside the trust, beneficiaries can then make arrangements to sell the property as they see fit.
WHEN TO SELL A HOUSE IN A TRUST
So when can and should you sell a Los Angeles house that is inside a trust? It’s all about the circumstances that are best for you, as a beneficiary, or for the trust if you are a trustee.
TO BENEFIT THE TRUST
Trustees can sell trust property like homes to benefit the overall assets of the trust. For example, if the home’s value has increased and selling it would increase the overall value of the trust assets, this can be considered a trust-beneficial home sale.
TO PAY THE TRUST DEBTS
Like a person, a trust can accumulate debts as a separate asset-holder. If this happens, selling a trust-owned house can be seen to benefit the trust and pay the trust debts. Likewise, even a home that has been given as a specific gift may be sold if it is the only available asset to pay estate or trust debts.
TO DROP UNPROFITABLE PROPERTY
Not all homes are profitable to own. Regional economic downturns or high maintenance costs can make a house unprofitable for both the trust and any specific beneficiary.
WHEN YOU LIVE TOO FAR AWAY
Sometimes, selling a house out of its trust is a practical logistical decision. Both beneficiaries and trustees may choose to sell a trust house under the right circumstances if distance stops them from maintaining the home for profitable benefit.
WAYS TO SELL A HOUSE IN A TRUST
Now that we’ve covered the complex who, why, and when of selling a house inside a California trust, let’s talk about your options. If you are a trustee in an approved home selling situation or a beneficiary specifically gifted a house inside the trust, you can choose to sell using the usual available avenues. Of course, it will help to have a knowledgeable team to assist the property ownership transition from the trust to the new buyers.
REAL ESTATE MARKET
You can choose to sell your trust home in the mainstream real estate market. For homes that are in great condition and already move-in-ready, this can be a good choice. You will, of course, need to also jump through the usual hoops to prepare the home for market, work with real estate agents, attract buyers, negotiate, and then navigate closing.
HOME REHAB BUSINESS
The real estate industry only works for homes that are ready for it. If the property is shabby, needs serious repairs, or if you need to sell quickly without delays, then the typical agent-buyer process may not be right for you. The alternative is to sell to a professional home rehab team like Sellers Advantage. After one no-obligation appraisal, we’ll make a cash offer that you can close in just a few days from accepting our bid. Because we are professional rehabbers, we specialize in taking all the concerns of home-selling off your hands.
If you have inherited a trust home and are far away or don’t have the time to sell, we’ll take care of the hassle. If you need to sell a trust-owned home quickly for the sake of the trust, we’ll get you the cash value and take a costly property off the trust asset list.
PROFESSIONALS WHO CAN HANDLE A TRUST PURCHASE
Last but not least, be sure to work with professionals who have experience with trust properties. Because a trust is owned through a financial structure, it requires a few extra steps to transfer trust-owned property cleanly. Professionals with these skills include estate lawyers, financial managers, real estate businesses and some real estate agents.
SELLER’S ADVANTAGE FOR LOS ANGELES TRUST HOMES
Do you need to sell a Los Angeles house fast that is inside a trust? We can help. The Seller’s Advantage team has worked with all types of home buyers, many of them trustees and trust beneficiaries. Whatever your situation, we can make a cash offer and help you quickly close the necessary paperwork. Contact us form or give us a call at 949-506-3973 to schedule a no-obligation appraisal for your property.