Trustee
Definition and meaning of Trustee in real estate.
A trustee is an individual or corporate entity legally designated to hold, manage, and distribute property or assets for the benefit of another person or group. The trustee is bound by a fiduciary duty, meaning they must act solely in the best interests of the trust's beneficiaries.
In more detail
In real estate, trustees are commonly involved in trust agreements, estate planning, and deed of trust foreclosure proceedings. For example, in many states that use a deed of trust instead of a mortgage, the trustee holds the property's legal title as security for the lender until the loan is paid off.
If the borrower defaults on the loan, the trustee has the authority to initiate a foreclosure sale to recover the lender's funds. Buyers and investors must verify a trustee's authority to sell a property when purchasing real estate out of a trust to ensure the transaction is legally valid.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Legal Responsibility | Fiduciary duty to beneficiaries |
| Real Estate Role | Holds legal title under a deed of trust |
| Typical Authority | Can sell or manage property based on trust terms |
The trustee of a family estate signs the listing agreement and deed to sell a residential property on behalf of the children who are named as beneficiaries.
Frequently asked questions
Can a trustee sell a house without the beneficiaries' permission?
Yes, if the trust agreement grants the trustee the explicit power of sale, they can sell the property without obtaining consent from the beneficiaries.
What is the difference between a trustee and an executor?
An executor is appointed by a court to manage a deceased person's estate according to a will, whereas a trustee manages assets held inside a trust according to a trust agreement.