“Everything just a little different in Texas”, said Ed Lange, “We always have trouble with out-of state lenders who want to vest title in the name of a trust. In fact, it happened just last month. Under Texas law, a trust is not an entity – it’s a relationship—so we must vest title in the name of the Trustee, as a trustee of the ___ Trust, date X/X/X’”.
“Sometimes lenders disagree”, Ed continued, “and I need to explain that if title is vested in a trust, and a trust is not an entity, then who could make a claim? If the trust is not an entity, and title is in the trust, then nobody has no standing to make a claim and/or bring a lawsuit. There are other potential issues in the validity of title and even defense of claims. But at the end of the day – it’s wordy but its how we have to do it TX”.
Avoid a Horror Story Closing
While the phrasing of for Trusts might be a bit tricky, we’ve got a treat for you: a simple checklist of the documents buyers and sellers will need if they hold title, will be taking title, or if they are depositing funds on behalf of a trust that:
- Holds title and any of the original or successor trustees are now deceased or mentally incapacitated
- Holds title for a trust that is not a family trust for the benefit of the trustees
What to bring:
- Full copy of the trust and any amendments
- If there is no change to the original settlor/trustors and title is held by same, only a trust certification is needed
- Any additional documentation that may be required for our review of the trust (i.e., affidavit of death, resignation of trustee, doctor’s certification of capacity and all other documents as needed for review)
Don’t let a horror story ruin your closing, start working with your local Doma office today
