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What is a Trust Sale
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The process of selling a property held in trust is known as a trust sale. In most cases, the homeowner has passed away, or their assets have been placed in a living trust.
When selling a trust-held property, determine if it’s revocable or irrevocable. Knowing what type of trust the property is under will help you decide how to sell it or if it is even possible to sell.
An example of a trust sale of real estate is when there are multiple benefactors in a trust, and there is a need to equally distribute the asset to the beneficiaries. Selling a trust sale will help prevent an asset’s unfair distribution.
For instance, David left a trust with three beneficiaries: his daughter Beth and his sons Bryan and Ben.
The three of them agreed on the sale of the asset granted by their father (say, a house or land), and their submitted offer was accepted; the trustee will then manage the trust sale process from the title search, marketing, and closing.
Beth, Bryan, and Ben will receive portions from the sale of the property since they are the listed benefactors of their father’s trust.
Revocable vs. Irrevocable Trust
Revocable trusts, also called living trusts, can be amended by the grantor at any time after they have been established. Adding or removing beneficiaries or modifying trust asset management are allowed in this trust.
On the other hand, irrevocable trusts can’t be changed unless the beneficiaries agree. After creating a trust, the grantor loses control and no longer owns the assets.
How does the process of trust sale work?
In simpler terms, a trustee oversees a trust sale by identifying the property’s market value, marketing it, publicizing it, and submitting offers. Prices and terms are negotiated. The trustee will execute a sale agreement with the beneficiaries’ shares. After the property is sold, the proceeds may be retained within the trust. However, it will still depend on the decision of the beneficiaries and the terms governed by the trust.
If you have any questions about a trust sale of real estate or would like to know more about what is a trust sale, you may contact our team anytime to get started.