A complete estate plan often includes a whole slew of documents- at least a will, a durable financial power of attorney, and a healthcare power of attorney. It might also include a trust. If you’re estate plan includes a trust, it probably also includes a related document- the certification of trust.
What is a certification of trust?
A certification or certificate of trust is a document that certifies that a trust exists. It confirms who has the authority to act on behalf of the trust. This document is short, usually only one to two pages long. It offers important information like who established the trust, who the trustees are, and more.
A certificate of trust is often used to share relevant trust information with third parties. These third parties include banks, financial institutions, title companies, and insurance companies. These institutions often require the included information before allowing a trustee to act. A certificate of trust bestows the relevant information without having to provide the entire trust document.
What information should be included?
The requirements for what needs to be included in a certificate of trust vary from state to state. In Arizona, the requirements of what information needs to be included in a certificate of trust is defined by statute. There are quite a few requirements, all of which are important. Most of them have to do with who established the trust and when, who the trustees are, and what powers the trustee has. Certifications of trust also include information about the manner in which a trustee can take title to trust property. They also include whether or not the trust is amendable. The statute specifically notes that a certification of trust does NOT need to contain the dispositive provisions of the trust.
There may be certain circumstances when additional information beyond what is required by the statute should be included in a certificate of trust. Some clients prefer to have a certificate of trust that includes an EIN for their irrevocable trust. When transferring real estate into a trust, Arizona law requires that the names and addresses of the beneficiaries of the trust be disclosed. This information may be included as part of the certificate of trust document.
When do I need a new certificate of trust?
You want to make sure your certificate of trust is accurate. So, when a key piece of information in the trust changes, you will need the certificate of trust to also be updated accordingly. The most common times a new certificate of trust is created is upon the creation of the trust, when the trust is updated, or when a trust becomes irrevocable. If you think you might need a new certificate of trust, contact your estate planning attorney.
