A living trust is supposed to make selling a house after a death easier, and usually it does. There is no wait for Letters from the Register of Wills, and no court approval for the sale. But trust sales still trip people up in small ways: a deed that was never moved into the trust, a successor trustee who does not know what papers to bring, or a buyer’s title company asking for documents nobody can find. Here is how it works in practice.
Check that the house is actually in the trust
This is the first and most important step. Signing a trust document does not move a house into it. Someone has to sign and record a new deed from the owner to the trustee.
Pull the current deed from the county land records. If the owner is listed as something like “Jane Smith, Trustee of the Jane Smith Revocable Trust dated May 1, 2012,” the house is in the trust. If it still says “Jane Smith,” the house never made it in.
When the house is outside the trust, the trust does not control it. If the owner has died, the house probably has to go through probate first, even if a pour-over will sends everything to the trust in the end. The personal representative sells it, or deeds it to the trustee, once Letters are issued. See /blog/how-long-does-probate-take-in-maryland/ for timing.
Who signs the deed
While the person who made the trust is alive. In most revocable trusts, the creator is also the trustee and can sell the house just like before, signing as trustee.
If the creator is alive but can no longer manage things. Many trusts name a successor trustee who takes over when the creator becomes incapacitated, often after one or two doctors certify it in writing. Read the trust’s exact language, because title companies will.
After the creator dies. The successor trustee named in the trust signs. If there are co-trustees, the trust says whether one can sign or all must.
The papers a title company will ask for
Maryland’s Trust Act lets a trustee give a buyer or title company a certification of trust under Estates and Trusts Article 14.5-910 instead of handing over the whole trust document. The certification states that the trust exists, who the trustee is, what powers the trustee has for this sale, whether the trust is revocable, and how title is held. It does not need to reveal who inherits what. For a house held in a trust in Carroll’s county seat, see how I buy houses in Westminster.
Expect the title company to also ask for:
- The recorded deed into the trust.
- A death certificate if the original trustee has died.
- Any written resignation or incapacity certification if a trustee stepped aside.
- Pages of the trust showing the trustee’s power to sell, and sometimes the full trust for title insurance purposes.
- The trust’s taxpayer identification number if it has become irrevocable.
Getting these together before you sign a contract avoids a last-week scramble.
Taxes worth knowing about
A sale by a trust to an outside buyer is taxed like any other sale: state and county transfer and recordation taxes apply, split according to the contract.
When the creator has died, the house usually gets a new tax basis equal to its value at the date of death. That often means little or no capital gain if you sell soon after. A written appraisal as of the date of death helps prove the number later.
Maryland also has an inheritance tax that can apply to property passing to beneficiaries who are not close relatives, and it can reach trust property, not just probate property. Spouses, children, and several other close family members are exempt. Ask the Register of Wills or an estate attorney whether a return is needed.
When beneficiaries disagree
A trustee has a duty to act in the beneficiaries’ interest and to follow the trust’s terms. Most trusts give the trustee power to sell without beneficiary approval, but a trustee who sells too cheaply or to a friend can be sued. Good practice is to get a written valuation or broker opinion, tell beneficiaries the plan, and keep records of offers. If a beneficiary wants to keep the house, a buyout at a fair price may be cleaner than a sale.
Getting the house ready
The trustee is responsible for protecting the property until it sells. Keep insurance in force and tell the insurer the owner has died or the house is vacant. Keep the utilities on, pay property taxes, and keep any mortgage current. If payments have fallen behind and the servicer is sending notices, call Maryland HOPE at 1-877-462-7555 and a HUD-approved housing counselor; successor trustees and heirs can ask for help too. See /stop-foreclosure/.
Decide early whether to clean out, repair, and list, or to sell as is. A trustee in another state, with a house full of belongings and a roof near the end of its life, often finds the as-is route easier to justify to beneficiaries when the numbers are laid out side by side. See /sell-inherited-house-maryland/.
Where the money goes
Sale proceeds go to the trust, usually into a trust bank account, not to individual beneficiaries. The trustee then pays final bills and expenses and distributes the rest according to the trust.
Does a trust sale need court approval in Maryland?
Usually not. A trustee with power of sale can sell without going to court unless the trust says otherwise or there is a dispute.
Can a successor trustee sell to themselves?
That is a conflict of interest. It may be allowed if the trust permits it or all beneficiaries agree in writing, but get an attorney’s advice first.
What if the trust document is lost?
Search the creator’s papers, safe deposit box, and the drafting lawyer’s files. If it truly cannot be found, a court may need to sort out who has authority.
Talk through your situation
Call or text Evan Weissman at (410) 498-7473 if you are a trustee with a Maryland house to sell. You can also send me the address and situation at /contact-us/.