Fiduciary Deed Form

What Is a Fiduciary Deed?

With a fiduciary deed, a property can be legally conveyed to a new owner. But contrary to all other deeds, this form is not signed by the current owner of the property. A trusted representative of the owner signs it on his/her behalf.

Fiduciary vs. Quitclaim Deed

Neither fiduciary nor quitclaim deed gives guarantees against possible encumbrances.

When a property owner signs a quitclaim deed, he or she transfers the rights to the property they might have. A trusted representative of the owner signs a fiduciary deed and transfers the rights the owner might have.

Suppose the owner of a house wants to transfer her summer house to her grandson. She issues a quitclaim deed on behalf of him. If she forgets to pay last year’s property tax, her grandson, as a new owner, will be asked to pay the debt.

Suppose the grandmother is in a coma in a hospital after surgery and cannot sign anything herself, but she has appointed her daughter as her trustee in advance. The daughter can transfer the house to her son with a fiduciary deed if she believes that she acts in her mother’s best interests. Still, if the grandmother forgets to pay the property tax, the grandson will be held liable.

When to Use a Fiduciary Deed

There are situations when the owner of a property does not sign property-related documents himself/herself:

• The owner is dead, and the property is in the hands of an executor.
• The owner has appointed a trustee.
• The owner is a minor.
• A trust manages the property.

In all these cases, a fiduciary can sign a deed on behalf of the owner if he or she believes the transfer of real estate is in the owner’s best interests.

What Are the Limitations of a Fiduciary Deed?

This type of property conveyance is not the best option for a beneficiary to the deed since it does not give any guarantees against possible encumbrances. There is an additional risk that the trusted person’s authority or intentions could be challenged in a court, causing disruption to the deed.

In the above example, the grandmother, if she recovers from her illness, or another family member can claim that it was never her intention to convey the house to the grandson and the trustee was well aware of it.

Download your fillable Fiduciary Deed template in PDF format.

PDF

What Should Be Included in a Fiduciary Deed?

The forms of legal deeds vary from state to state, and the correct form for each one can be easily found online.

The typical fields are:

• The name of the fiduciary, i.e., the one who signs the deed on behalf of the owner and a note that he or she is authorized to do so;
• The name of the beneficiary to the deed, the grantee;
• The legal description of the property (It is crucial to fill in the correct parcel number to avoid any misunderstanding.);
• The amount of money that was paid for the property. (Usually, a property is transferred free of charge with a fiduciary deed. The consideration still has to be mentioned in a document. Under such circumstances, commonly, it equals a symbolic $10.);
• The witnesses’ signatures (They are required in some states.);
• Typically, a fiduciary deed is verified and signed by a notary public.