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Estate Planning

Discover the Benefits of a Certificate of Trust

Jul-22 2024

What is a Certificate of Trust?

A Certificate of Trust is a document that serves as proof of the existence of a trust and summarizes its key elements without revealing the detailed private information contained in the trust itself. It verifies the trustee’s authority and the trust's existence, providing necessary information to financial institutions and other parties without disclosing the specifics of the trust's assets or beneficiaries.

When to Use a Certificate of Trust

  • Financial Transactions

    When a trustee needs to open a bank account or conduct financial transactions on behalf of the trust.

  • Real Estate Transactions

    Used in buying or selling property held in the trust to prove that the trustee has the authority to act.

  • Legal and Estate Planning

    It may be required by legal professionals or institutions when managing the estate planning elements linked to the trust.

Why Use a Certificate of Trust?

The Certificate of Trust simplifies transactions involving a trust by providing a concise summary of the trustee's powers and the trust's terms. It is beneficial because:

  • Privacy

    It keeps the details of the trust’s assets and the identities of the beneficiaries confidential.

  • Efficiency

    It streamlines transactions involving the trust by providing clear, summarized information that is typically required by institutions.

  • Compliance

    It ensures that the trustee’s actions are within the scope of authority granted by the trust, helping to avoid disputes and legal challenges.

How to Use a Certificate of Trust

  1. Complete the Certificate: Fill in details like the trust’s name, date of establishment, trustees’ names, and powers granted to the trustees.

  2. Verification: The trustee’s signature might need to be notarized to verify the document's authenticity.

  3. Use the Certificate: Present the Certificate of Trust to financial institutions, real estate agents, or legal entities as required for trust-related transactions.

  4. Keep it Updated: If changes occur in the trust, such as a change in trustees or amendments to the trust terms, update the Certificate of Trust accordingly.

Conclusion

A Certificate of Trust is a vital tool for trustees, providing a way to prove the trust's validity and their authority without compromising the privacy of the trust details. While it facilitates significant transactions and interactions involving a trust, handling this document with care is crucial due to the responsibilities it encompasses.

Get started with your Certificate of Revocable Living Trust here.