Engaging With Trust For Land Purchase For New Resi Development

[Bryan Hancock]

What has been your experience with dealing with trustees or beneficiaries involved in trusts that own raw land for development?  We have a parcel we wish to purchase for about $2M and are trying to think through the best way to approach for the owners.  

[Jerel Ehlert]

Unless you are talking about a bankruptcy trustee, all trusts in TEXAS are governed by the same section of the Texas Property Code - regardless of testamentary trust, estate planning, or tax purpose. But that's not to say that a trust under a different state's laws could be the owner.

Generally, the owner of record of trust property (the "res") is the trustee, and that is who can sign a contract to sell. But the trustee must act in the best interest of the beneficiaries. In Texas, there's very few limits on who can be a trustee, so the quality and sophistication of the person you must deal with can be all over the place. It will almost certainly be an individual (only entities allowed are Trust Companies, banks, insurance companies, and other regulated entities - no generic LLCs, etc.).

As to tracking down who is the trustee, a deed only needs to "reasonably identify" the grantor/grantee/real property, so a deed naming the trust as the grantee is allowed to be recorded. Skip tracing and/or a PI is your best bet. Start by pulling the recorded instruments related to the parcel. The deed conveying title to the trust is step 1. Then search the probate records for the grantor's names and your standard skip tracing from there.