In the Commonwealth of Kentucky, trustees use the same deed forms applicable to regular transfers to convey real property out of a trust. The type of deed required depends on the type of warranty of title the trustee wishes to convey.
According to KRS § 386B.4-010(1), a trust is created when a settlor transfers property to another person as trustee either during the settlor’s lifetime, or by will or other disposition to take effect upon the settlor’s death. Find the laws governing trusts and trust administration codified as the Kentucky Uniform Trust Code at KRS § 386B. (Note: trusts for estate planning under the Uniform Trust Code are separate from statutory trusts as codified at KRS § 386A – Kentucky Uniform Statutory Trust Act).
A settlor is the person funding the trust with assets, which may include real property. A trustee is the fiduciary who administers the trust for the benefit of the trust beneficiaries, or individuals having a present or future interest in the trust. The provisions of the trust, including the designation of a trustee, authorization of powers to the trustee, and identification of trust beneficiaries, are established by the trust instrument, usually referred to as a trust agreement or a declaration of trust.
In a transfer of real property from the trust, the trustee conveys title as grantor. Because the trustee is acting in a representative capacity, the deed requires information about the trust, including the trust’s name, date, and mailing address (typically the address of the acting trustee).
All acting trustees must sign the deed for a valid transfer. Recipients of a deed executed by a trustee may ask for a certification of trust (KRS § 386B.10-120). This instrument verifies the trust’s existence and the trustee’s authority to enter into the transaction at hand.
The type of deed the trustee uses determines the warranties of title for the transfer. In a general warranty deed, the trustee warrants title “against the claims and demands of all persons” (KRS § 382.030). The special warranty deed contains a narrower warranty; the trustee warrants title only “against the claims and demands of the grantor and all persons claiming by, through, or under him” (KRS § 382.040). A quit claim deed is a fee simple deed that conveys the grantor’s interest under KRS § 381.060, but does not offer any warranty of title.
Trustees should take care to meet all content and formatting requirements for deeds affecting real property, including a legal description and recitation of the source of title (KRS § 382.110). Real property transfers in Kentucky require a notarized certificate of consideration signed by both grantor and grantee acknowledging either the full consideration paid or the estimated fair cash value of the property, as well as a signed preparer’s statement (KRS § 382.135; KRS § 382.335).
Contact a lawyer with any questions regarding trusts, as each situation is unique.