Trust and POA Review

A property owner might establish an Inter Vivos or “Living” Trust to hold title to a real estate parcel in order to conserve or protect that property for beneficiaries named in the Trust documents. Any transfer of property either to or from a Trust will be valid only if the trustee has proper authority to approve the transfer and to execute the documents required to close the deal. PPDocs will review the Trust documents to verify this authority in any jurisdiction.

Some of the more common problems that our Trust document review services can help to prevent are:

• • Verification that the Trust has properly named a trustee, and that trustee is authorized to take title to the property. The Trust itself is a relationship among various parties and it generally does not take or hold title to a property itself. A court can designate a trustee if a Trust document fails to do so, but the court’s choice might be at odds with the Trust grantor’s or the beneficiaries’ choice.

• • Property held in a Trust can be transferred out of it only by the trustee unless the Trust documents state that the beneficiaries have the sole power to direct the trustee’s actions. Again, the issue is whether a trustee or the beneficiaries have proper authority, per the Trust documents, to take the necessary actions to close a transaction.

• • Trusts that include open classes of beneficiaries (e.g. unborn or unnamed children) pose questions regarding the trustee’s authority to transfer or take property on behalf of those beneficiaries. Different state laws can treat this question differently, and confer different powers or authority on the trustee.

One or more parties to a real estate transaction might execute a durable power of attorney (POA) to appoint an agent to execute documents on his or her behalf. The POA enables a closing to proceed when the person who executed it is unavailable, for example, due to travel or poor health. The extent of and limits on the agent’s authority are generally defined in the POA document.

As a result of new real estate closing regulations, lenders and finance entities will accept POAs only if they are in strict compliance with the form and content requirements imposed by those regulations. A lender’s legal department will typically request copies of a POA in advance of the closing to verify that it complies with applicable regulations.

POA document review services from PPDocs will give the parties to a transaction greater assurances that the lender will accept the POA without amendments or revisions that could delay the closing.