What does title held in trust mean?
Answer:
The property is being held for the benefit of another. This is often done to avoid giving ownership outright to a child, but there are many complex uses of this type of arrangement.
A simple example is when a parent leaves an investment property to a child who is under 18. Since the child is too young to own and manage the property, the parent would give title to a trustee for the benefit of the child. The trustee would then hold "title in trust." Such a trustee would manage the property and collect income from the property and then pass the income on to the child. The trustee is usually paid a percentage of the income. After the child reaches a certain age title passes to the child.
Could be several things, but with real estate it most often means that the title is held in a trust of some sort, with the trustees controlling the trust.
"John and Jane Smith, trustees of the Smith Family Trust" is not the same as "John and Jane Smith, husband and wife as joint tenants" even though it names the same two people. The former has the property owned by the trust, and if the two people die (people do), the trust is still there, and the successor trustee takes over right away without probate, (usually) without estate taxes, and if anyone has ever challenged disposition of property held in a trust successfully, I've never heard of it. Whereas in the latter case, the property goes through probate, possibly estate taxes, and perhaps years before everything is resolved, and people challenge the dispositions of property through wills successfully every day.
Talk to an estate planning attorney for more information.
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