WHAT ARE THEY AND WHY THEY ARE NEEDED
When a third party, acting in good faith and for valuable consideration, has no actual knowledge of whether the Trustee of a Trust has the proper powers to act, a Trust Certification given to this third party will fully protected them in their dealings with this Trustee(s) even if no copy of the Trust is provided. (California’s Probate Code, Section 18100.5)
The Trust Certification gives the generalities of the Trust and is completed and signed by all acting Trustees in the presence of a Notary Public, under penalty of perjury.
What does the Trust Certification state?
• The existence of the Trust and date of the Trust.
• Who are the Settlors (persons who originated the Trust) and the current Trustees.
• The powers of the Trustees.
• Whether the Trust is revocable or not and who has the right to revoke.
• Who and how many Trustees are required to sign on behalf of the Trust.
• The Trust identification number, whether it is a social security number or a separate IRS issued tax identification number.
• The manner in which title to Trust assets should be taken.
• The legal description of any interest in real property held in the Trust.
• A statement that that the Trust has not been revoked, modified, or amended in any manner.
What is the reason for this Trust Certification?
The Trust Certification provides the third party with assurances that the Trustees, under the Trust Agreement, have the power to buy, sell, borrow or conduct particular business or personal transactions. The third party has to be able to rely on this document and should issues arise in the future, then the responsibilities for any false or misleading statements will fall on the Trustee for perjuring themselves.
Should the Trust Agreement itself be provided?
Lenders will require a copy of the Trust if the Borrowers are borrowing under a Trust. Escrow and Title will normally ask for a copy of the Trust Agreement along with the Trust Certification. A copy of the Trust Agreement will definitely be required if the original Trustee is no longer acting and a “Successor” Trustee has taken over.
However, the code states that if a third party has been given a Trust Certification but has refused to accept it and insisted on getting the actual Trust Agreement, then the third party could be held liable for damages, including attorney’s fees incurred by the Trustee, if issues should arise and the court determines that the third party acted in bad faith in requesting the trust documents. (Example: the third party demanded the Trust Agreement to access private information for illegal use).
For a copy of a Trust Certification, go to our link on our Forms site: Here.
When requested to complete and sign a Trust Certification, we request that our clients consult with their legal counsel with respect to the form, its content, and its use.
Reminder! A Trust Agreement and its Amendments are important documents! Keep them in a safe place and, most importantly, alert your family as to its location.