EXECUTOR DEEDS AND TRUSTEE DEEDS IN MISSOURI
I have discussed different types of deeds in other blog articles. In this article, I will discuss executor deeds and trustee deeds in Missouri. Specifically, what they are, when they’re needed and why they are useful.
As a probate attorney O’Fallon, Missouri I often assist personal representatives (the term for an executor in Missouri) with administering the property of a deceased family member. A Missouri personal representative deed can be executed by the personal representative (if the deceased had a will) or an administrator’s deed (if the deceased did not have a deed) to transfer property from an estate to a third party.
Say Uncle Dave passes away and left a will naming his nephew Donnie the personal representative of his estate. In addition to taking other action with respect to the estate, Donnie must also administer Uncle Dave’s home. The will says that the house is to be sold and the proceeds split among his three nephews, Donnie, Doug and Dennis equally. The house is put for sale and a third party, Bill Smith, buys the house.
At closing, the deed transferring title will be a personal representative’s deed in which Donnie states he is the personal representative of the estate, attaches a copy of his letters testamentary and transferring the property to Bill Smith.
In effect, the only differences between this transaction and the usual transaction is that the seller is an estate, not a living person and typically, but not always, the estate does not provide warranties as to title.
A trustee deed in Missouri is very similar, except in this case the seller is not an estate but a trust and the trustee named in the trust document has the power to sell and is the party that executes the document as the seller.
As with executor deeds, a trustee may or may not provide warranties as to the validity of title to any trust estate property he or she is selling to a third party.
Power of Attorney Deeds
Another type of deed that is sometimes seen when a property is sold is a power of attorney deed in Missouri. In this type of deed, the seller is an agent or attorney-in-fact for a principal, i.e. they are the power of attorney for a person who may not be competent to sell their property but their circumstances require the property to be sold.
Let’s say Grandma Ann creates a Missouri financial power of attorney naming her grandson Andy as her power of attorney. A few years later, Grandma Ann has dementia and the family is concerned that she is no longer able to take care of herself and live safely in her home.
Andy assumes his duties as Grandma Ann’s power of attorney and decides that she must go into an assisted living facility. However, because Grandma Ann has limited funds, her house must be sold. The power of attorney document specifically allows the power of attorney to acquire or sell property, as necessary.
With this power in hand, Andy is able to sell the property as power of attorney for Grandma Ann, the owner of the home, and now Grandma Ann has adequate funds to pay for her needed stay in assisted living.
Selling real property as a fiduciary, i.e. as an executor, trustee or as a power of attorney is something that could result in personal liability if the deed is not correctly executed. For example, a shoddily drafted title company deed may warrant title when that was not the basis of the bargain in a particular sale.
If there’s a problem with title, then the fiduciary could be responsible for the loss to the trust or the estate. That’s not a good place to be and, just as with estate planning, it’s important to realize that mistakes are often realized years later.
Having a deed an estate planner O’Fallon draft a deed is a good step to prevent unnecessary exposure to liability.