Trust is a very important part of any state plan. It is needed for tax benefits, assets protection, setting up the trusted ones as financial security in the future, and avoiding probate.
When you are about to do personal business, such as transferring the property in or out of your living trust, banks, lenders, or any other financial institution will ask for the trust documentation. This is because institutions are interested in knowing that trust really exists and you have the authority if you say so. The certificate of trust proves that you really have control over assets, and most organizations universally accept the certificate of trust instead of the whole trust document.
However, apart from just having a trust document, you need to understand why you need it? Read to know the details:
Certificate Of Trust
Before understanding the certificate of trust, you must know who the trustor and trustee are.
A Trustee or settlor is the person or any association of persons who found a trust body.
A trustee is an individual who takes the responsibility of keeping the property with trust.
A trust certificate is an abbreviated version of trust that gives information about the trust and trustee and keeps certain information private. It is a legal document that enlists the trustees for the trust of property in the trust body. It can be said that the trust bodies issue it to trustees as evidence of ownership.
You can also call it a certification of trust, abstract of trust, or memorandum.
The exact term to be used depends on the condition of issuance and applied to various types of trust certificates, such as revocable trusts or irrevocable trusts.
It implies that the trustee keeps certain properties in the trust body and is permitted to withdraw such properties from the trust at the given terms and conditions.
What Does A Certificate Of Trust Contain?
When the certificate of trust is created, it is done by declaring the penalty of perjury. Generally, it has the following content in it:
- Information related to acting trustee
- Details on the trustees’ powers
- Address and Identification of trustor
- Date of founding the trust
- Date of any changes made in the trust
- Specification of whether a trust is revocable or irrevocable and who can revoke it
- Tax identification number (TIN) of trust
- The legal description of property if trust is related to real estate
When Is A Certificate Of Trust Needed?
Financial institutions always demand critical information regarding trust to know the ownership details. A copy of trust can also suffice this need, but trustors might not want to share their important information with others. In such a case, a certificate of trust helps keep things private and provides only the needed information to financial institutes.
Moreover, some trust documents are extensive, ranging up to 100 pages. Therefore, if possible, providing an organization with a simple yet compact and critical piece of information is better than handing out an extensive document.
How To Get A Certificate Of Trust?
If you need a certificate of trust, you can create your own certificate of trust following the guidelines given on the page: Application Gov.us. Also, remember that most states have their own set of requirements which you should complete making it a legitimate document.
You can also find templates available online that suit your needs.
Financial institutes like brokerages or escrow companies mostly have their own trust certificate templates.
Additionally, an estate lawyer who sets up trusts can also provide you with the form.
No matter how you get the document, all acting trustees have to sign the form. A notary public also must sign it.
Here is an example of how a certificate of trust looks like: