Title Insurance

Trusts & Title Insurance | Minnesota Commercial Title Company

We often deal with transactions involving trusts and we wish to address the necessary documentation that's required when a trust is involved in a commercial title insurance transaction.

What is really a Trust?

A trust is a legal entity that holds property for that advantage of others. The trust document (typically a trust agreement) appoints a person or corporation (a Trustee) to manage the trust according to its terms.

Trusts are made to setup some guidelines for the handling of property. It doesn't necessarily have to be property – it may be other types of property as well – such as money or stocks.

For our purposes within the title industry, we're worried about trusts involving real property. Trusts are usually setup to determine what happens with a particular piece of property. The key document inside a trust is the trust agreement itself. Often this document is drafted by an attorney. We always advise clients to have trust documents drafted by an attorney. We've seen significant problems with do-it-yourself online trusts that need to be fixed in court at a later date and also at sometimes considerable expense.

When we encounter a property that's going to be sold or mortgaged and the ownership is inside a trust, we are required to review a few key documents. Some of these documents will be recorded in the property records.

Certificate of Trust

The first item that we're going to be looking at is either a certificate of trust or the trust agreement itself. The certificate of trust is basically a synopsis of what's included in the trust agreement itself. The trust agreement is often very large and can consist of numerous pages. Often the trust agreement also has a great deal of personal information that the parties don't wish to reveal to the world by recording it within the public records. So our legislature has come up with a choice where we are able to obtain a synopsis from the trust within the form of the Certificate of Trust. The Certificate of Trust has certain items that need to be included as required by state statute. If those items aren't included we cannot accept or record the Certificate of Trust in the property records.

Affidavit of Trustee

Another item that has to accompany a Certificate of Trust is the Affidavit of Trustee. That form is also set by state statute. If the trustee is really a corporate entity (LLC, corporation, etc.), then we don't need an Affidavit of Trustee. If the trustee is definitely an individual, then we do need to record the Affidavit of Trustee with the Certificate of Title.

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