People want their confidential information inside of their living trust to remain confidential. However, after a Trust is executed the settlor(s) often find it necessary to disclose certain limited information in order accomplish the following: retitle assets into the trust; borrow money against trust assets; and insure the trust as owner of real property.
Fortunately, third parties requesting information about the trust – like banks, insurance companies and brokerage – only ask for limited information. That is, is the trust revocable or irrevocable; who are the current trustees; what powers does the trustee have; how should trust assets be titled; what is the trust’s taxpayer identification number; and has the trust been amended? A trustee’s certification of trust provides all such information.
In California, section 18100.5 of the Probate Code provides that, “(a) The trustee may present a certification of trust to any person in lieu of providing a copy of the trust instrument to establish the existence or terms of the trust. A certification of trust may be executed by the trustee voluntarily or at the request of the person with whom the trustee is dealing.” The certification must meet the following requirements: (1) say that the trust has not been revoked, modified, or amended in any manner which would cause the representations contained in the certification of trust to be incorrect; (2) be signed by all of the currently acting trustees of the trust; (3) have a notarial certificate acknowledging each trustee signature.
A certification of trust is helpful, or even required, when dealing with banks, stock transfer agents, brokerage houses, insurance companies, title companies, and other third parties. Estate planning attorneys often provide one with the trust for the client to copy and provide to retitle and insure trust assets.
If a third party who receives a certification of trust still insists on copies of the trust document to verify its information then the person providing the certification may refuse. If the matter become controversial and goes to court and the court determines that the third party acted in bad faith in requesting the trust documents (section 18100(h) Probate Code) then damages, including attorney’s fees can be awarded.
The initial certification of trust that you receive with your trust, however, becomes stale over time and must be updated. Each time you amend your trust you need a new certification of trust to reflect the amendment. Even without amendments, an old certification of trust often is unacceptable to third parties seeking to rely on it. Clients call me saying that their bank needs a more recent certification of trust to refinance their home.
Sometimes a client needs to provide a portion (excerpt) of the trust providing information not typically found in a certification of trust. For the excerpt to be acceptable, the Trustee will need to provide a trustee’s certification of abstract of trust. The certification, made under penalty of perjury under the laws of the State of California, says that the attached abstracted copy of said trust is a true and correct copy of the original trust as executed.
Lastly it is not always necessary to provide either the certification of trust or the abstract of trust. Some third parties are satisfied if the settlor provides them with a copy of the following pages from their trust: first page (title/declaration page), section listing the names of trustee, the signature (execution) page, and the notary page. Accordingly, ask whether this more simplified approach is acceptable. If not, anyone needing to provide a certification of trust by trustee or a certification of abstract of trust by a trustee may consider calling an estate planning attorney for assistance.
Dennis A. Fordham, attorney, is a State Bar-Certified Specialist in estate planning, probate and trust law. His office is at 870 S. Main St., Lakeport, Calif. He can be reached at Dennis@DennisFordhamLaw.com and 707-263-3235.