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Define Deed in Trust in Real Estate
Deed in Trust:
A deed in trust is a special piece of paper that gives someone, called a trustee, the power to take care of a piece of land or a house for the person who owns it, called the trustor. The trustor is also the person who benefits from this arrangement, which means they can still use the land or house while the trustee takes care of it.
Example:
For example, imagine Sarah owns a house, but she wants her friend Mark to help manage it for her. Sarah creates a deed in trust, which means she is still the owner and gets to use the house, but Mark is now the trustee and takes care of things like taxes and paperwork.
"A Deep Dive for Real Estate Agents"
Note: There is a difference between a deed in trust and a deed of trust. While they may sound similar, they are used for different purposes in the world of real estate.
A deed in trust, as we discussed earlier, is an instrument used to transfer real property to a trustee for the benefit of the trustor, who is also the beneficiary. The trustee manages the property on behalf of the trustor.
On the other hand, a deed of trust is a document used in some states to secure a loan on a property. It involves three parties: the borrower (also called the trustor), the lender (also called the beneficiary), and a trustee. In this case, the borrower transfers the legal title of the property to the trustee, who holds it as security for the loan provided by the lender. If the borrower repays the loan as agreed, the trustee releases the property's title back to the borrower. If the borrower fails to repay the loan, the trustee can sell the property to pay off the debt.
So, while both documents involve trust relationships, the purposes and parties involved are different. A deed in trust is about transferring property to a trustee for management purposes, whereas a deed of trust is about securing a loan using property as collateral.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In the land of Trusts and Deeds, a story's told, you see.
A trustor owns a house, quite big and bright and free.
They want some help to manage it, with tasks both big and small,
So, a deed in trust is made, to help with it all.
The trustee, a trusty friend, takes care of the house with glee,
While the trustor, who's the owner, gets to use it, oh so free.
The deed in trust, a special paper, gives the trustee power to act,
To manage and protect the land, and that's a simple fact.
Remember, my dear friend, in this tale of trust and land,
The trustor is the beneficiary, with the upper hand.
So, a deed in trust, a wondrous thing, brings people close together,
To care for land and property, in fair and stormy weather.