Selling a house that’s held in a trust can feel incredibly complicated, particularly when it comes to the legal and tax requirements. When it comes to Ohio, many families use trusts to protect real estate and simplify what happens when the grantor dies. But when it comes time to sell, the process can raise big questions, fast. Questions about authority, taxes, proceeds, and more.
That’s why we’ve created this guide to selling a house in a trust in Ohio. Knowing how trust sales work can help give peace of mind to homeowners, heirs, and trustees. It can also help avoid some relatively costly mistakes. You’ll need to review the trust document, so you know who has the power to sell. You’ll also need to do everything within the bounds of Ohio’s laws. We’ll even go over why working with a real estate agent or tax professional can make the whole process smoother.
Trusts sound more mysterious than they really are. A trust is just a legal arrangement that allows a person, the grantor, to transfer assets like a home, stocks, cryptocurrency, vehicles, and more, to another party, called a trustee. The trustee is charged with managing the assets for the benefit of one or more beneficiaries.
Ohio homeowners commonly create trusts to protect their property and assets and control how they’re handled after death. It also doesn’t hurt that assets in a trust can reduce the liability for estate taxes.
When a home is part of a trust, it’s considered trust property, not personal property. That means the trust’s assets are managed under the terms of a trust agreement rather than by the homeowner directly. Depending on the type of trust, the grantor may retain control during their lifetime or give up authority entirely.
Before selling a house in a trust, the trustee must verify that the trust document actually allows for the sale. In most cases, the property must also be sold for a minimum fair price, which can be determined by looking at comps in the area.
There are several different types of trusts, and they don’t all work the same. In Ohio, there are three main kinds of trusts: revocable, irrevocable, and testamentary. Knowing the differences between each can help trustees and beneficiaries make better, more informed choices.
A revocable trust is also known as a living trust. A revocable trust is the most flexible. The grantor keeps control of the property and can change or revoke the trust at any point in time. Since the grantor is the owner, for tax purposes, the home can be sold directly or through the trust without special approval. This is generally the most convenient option for asset protection while avoiding probate court.
An irrevocable trust cannot be changed once it’s been created. The grantor gives up ownership and control of the irrevocable trust’s assets. Selling any property from an irrevocable trust requires permission from the beneficiaries or a court order. The benefit is that all of the assets are typically safe from creditors. They may also qualify for certain tax advantages, but the process to sell assets held by the trust is more complex.
A testamentary trust is created through a will, and only takes effect following the grantor’s death. Since the property becomes part of the deceased’s estate, selling will usually mean getting the probate court involved. Either way, the trustee is bound to follow the specific instructions laid out in the will or trust provisions before any sale can happen.
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During a trust sale, the trustee holds all legal authority to sell the property. However, that power comes with clear responsibilities. The trust document sets the terms, and the trustee is legally obliged to follow them. Every decision, from pricing to accepting an offer, must follow the document and be in the best interests of the beneficiaries.
If a successor trustee takes over after the grantor passes, that person needs to confirm their role. This is done with paperwork and a trust certification. In some cases, there are multiple people who act as co-trustees. This means all of them need to agree before signing any contract or distributing sale proceeds.
Beneficiaries also have certain rights during the selling process. They’re entitled to transparency about the property sale. This includes updates on all offers and a full accounting of the proceeds once the sale has closed. Working with a real estate agent experienced in trust property can make this all much smoother.
If the property is in southern Ohio, the trustee may want to connect with a local cash buyer to simplify everything. Selling a home in trust in Cincinnati can be quick and easy with a local cash buyer.
Selling property from a trust can trigger capital gains taxes, depending on the home’s fair market value at the grantor’s death. A revocable trust usually reports gains under the grantor’s tax return, while an irrevocable trust pays its own taxes.
Other obligations may include inheritance or estate taxes. Work with a tax professional to calculate the tax rate, understand any step-up in basis, and stay compliant with Ohio tax requirements.
Before selling a home held in a trust, it’s important to confirm that the trustee has the legal right to complete the sale.
Review the trust certification or document to make sure it gives authority to sell the property. Next, order a title search to make sure there are no liens on the property. If one exists, like unpaid taxes or a contractor’s lien, it needs to be settled before the sale can move forward.
An escrow company can help manage payments and keep the closing process moving smoothly. Sales from certain trusts, such as irrevocable or testamentary, may require the involvement of the probate court.
Begin by confirming that the trust document or trust certification gives the trustee permission to sell the home. Review all trust provisions to understand who must sign contracts or approve the sale. Clear documentation avoids confusion later and helps ensure full compliance with Ohio law.
If there are multiple beneficiaries, the trustee should notify each of them before the property is sold. Depending on the terms of the trust, the beneficiaries may need to agree to the sale. In other cases, the trustee is permitted to act independently. However, keeping everyone in the loop protects the trustee and limits the potential for disputes.
Before moving forward, schedule consultations with both a trust attorney and a tax professional. They’ll confirm legal and tax requirements, explain any potential capital gains concerns, and review whether the trust must file its own return. Professional advice ensures compliance and helps reduce any risk of legal or financial errors.
An appraiser will help establish the fair market value of the home. This will be needed for tax purposes as well as for pricing. This is the point where you should order a title search to confirm ownership and identify potential issues. A professional inspector can help identify necessary repairs that can affect the ability to sell the property or its listing price.
Once everything’s in order, hire a qualified real estate agent to market the home. The agent will help review offers and negotiate terms that align with the trust’s best interests. If court approval is required, the trustee or trust attorney should submit the sale details to the probate court for confirmation.
Now you just need to coordinate with the title company or escrow company to handle the rest of the closing process. When the sale is complete, deposit all sale proceeds into the trust’s bank account. From there, the trustee will distribute funds according to the trust agreement, while following document storage and retention requirements.
Selling a house held in trust in Ohio doesn’t have to be as daunting as it seems. Once you understand the terms of the trust and know who’s in charge of making decisions, most of the work is done. From there, you just need to follow the right tax and legal steps, and you’re home free.
With the help of a real estate agent, trust attorney, and tax professional, you can make sure you’re fully compliant while getting the best possible outcome for the beneficiaries. If you’re ready to get a fair offer for an Ohio home in trust, trust H3 Homebuyers to guide you through every step.
