13
Aug 2014

New Jersey: Title is currently vested in the trustees of a living trust.

By admin

Recently Old Republic of New Jersey released the following question and answer in one of their monthly memos and we found it worth passing on.

Question: Title is currently vested in the trustees of a living trust.  The beneficiaries and the trustees are the same people.  Is this a problem?
Living Trust
Answer: For a New Jersey Title Insurance company it certainly could be.

Unfortunately in these situations New Jersey case law has held that where the sole trustee and sole beneficiary of a trust are identical, the legal and equitable titles merge and the trust collapses.    That is not necessarily the case where the trustee is only one of several beneficiaries or where there are multiple trustees and beneficiaries.

Thus in the situation where the sole trustee and the sole beneficiary are identical, we as a NJ Title Company will customarily ask for the deed to come from both the party as trustee and individually.  Judgments and liens against the individual will have to be addressed.  However, each case as always will be looked at on a case by case basis and may get approved by underwriting under circumstances where others would not.

Along the same lines, where the beneficiary and the trustee are the same individual and that individual has died, estate issues must be addressed.

Where there are multiple trustees and/or beneficiaries, the deed should come from the trustees.

As always, feel free to address any questions to a member of our New Jersey title insurance staff.

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