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Title your assets with precision

INTRODUCTION

An estate planning attorney should be precise in their work. At times clients think we are over the top at our office when we re-do something. We explain there is a reason.  If something is done the tiniest bit wrong it could be a HUGE problem later on.

TODAY’S PROBLEM

Today I am helping a client after his dad died. I will not use the real names but let’s say the guy that died was named John C. Dough.  The trust full and formal name is:

John C. Dough, Trustee of the John C. Dough Trust, Dated 5/5/85

He bought a new house some years ago and the title company prepared the deed. I have to say I am amazed how often title companies mess up deeds. The title company prepared the deed as:

John C. Dough, Trustees of the John C. Dough Living Trust, Dated 3/13/04

You see the differences?

1) Obvious typo in making trustees plural even though there is only one trustee. Not a big deal.

2) They added the word “living” to the trust name. This would not be critical if it were the only error.

3) They changed the date to a completely different date from when the trust was created. It was actually the date of an amendment but the date of the trust does not change by an amendment.

One error was not critical but two errors could be a huge problem!

The problem is this. Mr. Dough is deceased so he can not simply prepare a correctory deed as we otherwise could do.  Mr. Dough’s son has documents showing he is the trustee of the John C. Dough Trust Dated 5/5/85 and he also has an amendment dated 3/13/04. However, NOWHERE does Mr. Dough’s son have a trust agreement called the John C. Dough Living Trust with any date.

THE RESOLUTION

The first call is to the title company. Maybe they can fix it. However, I told the client do NOT let them promise everything is fine. It’s NOT and when my client’s daughter goes to sell the house in the future there will likely be a problem selling it. I believe the first option is for the title company to pay for title insurance and establish it in the proper trust name and date.

If the title company won’t do that then I have recommended to the client that he petition the Court to get a Court order establishing the property is in the original 1985 trust name and date. I would then record that order.

CONCLUSION

Use precision with your trust titling. Don’t cut corners. Don’t listen to a bank or title company who says it’s fine. It is NOT fine. Get it exactly right!

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