One essential component of effective trust-based estate planning is the Certification of Trust, a document that Tallahassee estate planning lawyers frequently use to facilitate various transactions related to a trust without revealing the private details of the trust itself. Whether you have a revocable living trust, irrevocable trust, life insurance trust, special needs trust, pet trust, or gun trust, a certification of trust is an essential element in your estate planning toolkit.
What is a Certification of Trust?
A Certification of Trust, also known as a Trust Certificate, is a document that serves as proof of the existence of a trust and outlines the key terms necessary for financial and legal transactions. It summarises the trust, verifying the trustee's authority without disclosing sensitive information in the entire trust agreement.
For example, Billy is the trustee of the Gemstone Family Trust. He decides to purchase property to add to the trust's assets. To complete the transaction, the title company and the lender request evidence that Billy has the authority to act on behalf of the trust and that the trust is in good standing.
Instead of providing the entire trust agreement, which contains sensitive information about the beneficiaries and the detailed terms of asset distribution, Billy can instead provide a Certification of Trust. This document generally includes:
- The name of the trust and date of establishment.
- The identities of the trustor (the person who created the trust) and the trustee(s).
- The powers of the trustee that are relevant to the transaction.
- The revocability or irrevocability of the trust.
- The manner in which title to trust assets should be taken.
- A statement that the trust has not been revoked, modified, or amended in any manner that would invalidate the certification.
The Certification of Trust assures the title company and lender that Billy has the authority to purchase the property on behalf of the trust, and they don't need to review the entire trust agreement. This not only maintains the privacy of the trust's contents but also facilitates a smooth real estate transaction. The title to the property can then be issued in the name of the trust, with Billy acting as trustee.
By using a Certification of Trust, the trustee can prove the existence and validity of the trust and their authority to act without disclosing the full details of the trust's beneficiaries or distribution plans, which might be sensitive or private.
Why Tallahassee Estate Planning Lawyers Recommend Certifications of Trust:
- Privacy: It keeps the details of the trust agreement confidential.
- Efficiency: Streamlines transactions by simplifying the verification process.
- Protection: Minimizes the risk of legal challenges to the trustee's actions.
How to Obtain a Certification of Trust?
The process generally involves the trustee preparing the document, often with the help of an estate planning lawyer, to ensure that it meets all legal requirements and accurately reflects the trust's terms. By understanding and utilizing this document, trustees can maintain privacy and streamline transactions relating to the trust.
If you're looking to establish a trust as part of your estate plan or need guidance on managing trust-related transactions, contact our Tallahassee estate planning lawyer to discuss how trust planning can accomplish your estate planning goals.
