[WSBARP] How to Insure a Trustee Conveyance When the Trust Agreement is Missing

[Dwight Bickel]

My advice is to get in contact with a senior underwriter for the title company in that county that will be asked to insure the conveyance to the next owner. The title company underwriter is more senior than a title officer. An underwriter has the authority to accept known risks, and has the experience to guide you how to reduce the risks. The underwriter will seek evidence related to the persons and circumstances when the Trust was established to determine the powers of the Trustee and the Beneficiaries of that Trust. The underwriter must evaluate and reduce the risks that there is a Trust that might be contrary to the proposed conveyance. So, the focus will be upon who could be Beneficiaries of that Trust and what are the powers of the current Trustee, then obtain consents from all such persons that the conveyance and the distribution of proceeds is consistent with whatever claims such Beneficiaries might have. The more clear those facts appear, the less likely that there could be Beneficiaries that could challenge the conveyance.

If the creator of that Trust is living and the Trustee identified in that deed is living, it is more likely to persuade a title company to assume the risks to a purchaser based upon affidavits, consents by Beneficiaries and indemnities to the title company. If the creator of that Trust is not living, and worse yet if the grantee Trustee is not living, then even consents and indemnities from all heirs will leave a material risk there could be Beneficiaries that are not heirs, who could have claim to the property that could prevent a conveyance. If claims were limited to the proceeds, then a purchaser could be insured based upon indemnities from heirs or others. But if claims could prevent conveyance, which would be binding upon a successor owner due to the recorded deed, then the title company will not be willing to assume that risk based upon indemnities.

If such evidence to reduce risks cannot be produced, in a worst case a legal action would be required with publication to unknown possible Beneficiaries leading to a Decree establishing the terms of the trust binding upon all Beneficiaries brought within the jurisdiction of that Court. A "friendly" legal action could be started, then a TEDRA agreement with heirs might be possible, especially if there is low likelihood about Beneficiaries who are not heirs who would need to be joined.

Dwight A. Bickel
Real Property Title Advisor
Washington Title Professional
Dwight at DwightBickel.com<mailto:Dwight at DwightBickel.com>
https:/dwightbickel.com
206-484-1976
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