72-36-206. Effects on real property transactions.
72-36-206. Effects on real property transactions. (1) This section relates only to conveyances of real property to or from a trust and supplements but does not modify other substantive provisions of Title 72, chapters 33 through 36, relating to the creation or validity of trusts.
(2) Except as otherwise provided in Title 72, chapters 33 through 36, a conveyance of real property to a trustee designated as such in the conveyance vests the whole estate conveyed in the trustee, subject only to the trustee's duties. The beneficiaries of the trust take no estate or interest in the real property, but may determine or enforce the terms of the trust as provided in chapters 33 through 36.
(3) An instrument creating or amending a trust need not be recorded, but may be recorded if properly acknowledged.
(4) If there is no clear reference to or designation of a grantee as trustee in a conveyance or in a separately recorded instrument recorded in the same county as the conveyance and describing the same property as described in the conveyance, the conveyance must be considered to be absolute to the grantee, in favor of purchasers or encumbrancers from the grantee, who were without actual knowledge and who acted for a valuable consideration, despite any valid trust that may exist.
(5) Unless limitations upon a trustee's power or authority are set forth in the recorded conveyance of real property to the trustee or in a separate trust instrument, portion of a separate trust instrument, or abstract of a separate trust instrument recorded in the same county, there are no limitations upon the trustee's power or authority to convey or encumber the real property in favor of third persons who were without actual knowledge and who acted for a valuable consideration. A separate trust instrument incorporated by reference in a conveyance to a trustee may not limit the trustee's power or authority to convey or encumber unless the limitations are set forth in the trust instrument, portion of a trust instrument, or abstract of a trust instrument that is also recorded in the county where the real property is located. An amendment to a recorded trust instrument may not affect the power or authority of a trustee to convey or encumber unless it is also recorded in the same place.
(6) A subsequent conveyance from a person designated in the original conveyance as trustee or from the successor trustee conveys the whole estate vested in the trustee, except as limited by the terms of the conveyance. The identity of a successor trustee may be established by a recorded affidavit of the successor trustee specifying the successor trustee's name and address and the date and circumstances of succession and confirming that the successor trustee is currently lawfully serving in that capacity.
(7) In an action or proceeding by a third person involving the real property granted to a trustee, the person designated as trustee in the original conveyance, or the successor trustee as established in subsection (6), or, if none, the person then actually serving as trustee, or, if none, any beneficiary designated by the court to represent the interests of the beneficiaries is considered the only necessary representative of the trust and of all persons with an interest in the trust. A judgment is binding upon and conclusive against the trust and all persons interested in the trust as to all matters finally adjudicated in the judgment.
(8) The designation of the name of a trust in a recorded conveyance vests the estate in the trustee of the trust. A subsequent conveyance may be made by the trustee. The identity of a party serving as trustee may be established by a recorded affidavit of the party or by another recorded instrument specifying the trustee's name and address and confirming that the party is currently serving as the trustee.
History: En. Sec. 213, Ch. 685, L. 1989; amd. Sec. 2, Ch. 688, L. 1991; amd. Sec. 82, Ch. 494, L. 1993; amd. Sec. 2487, Ch. 56, L. 2009.