What Is a Real Estate Trust?

A real estate trust is a legal arrangement where a trustee holds title to property for the benefit of one or more beneficiaries. Trusts are commonly used for estate planning, probate avoidance, tax benefits, and managing real estate assets.

Real Estate Trust: Simple Definition

A real estate trust is a legal entity that holds property on behalf of beneficiaries. The trustee manages the property according to the trust agreement, and ownership passes according to the terms of the trust instead of going through probate.

Why People Use Trusts for Real Estate

Property owners commonly use trusts to:

  • Avoid probate and simplify inheritance.
  • Maintain privacy — unlike wills, trusts are not public record.
  • Control how property is managed if they become incapacitated.
  • Transfer property smoothly to children or beneficiaries.
  • Protect assets in certain trust structures.

Types of Trusts Used in Real Estate

  • Revocable Living Trust — the owner maintains control and can modify or revoke the trust.
  • Irrevocable Trust — cannot be changed once created; may offer asset and tax benefits.
  • Land Trust — keeps ownership private by listing the trustee on title.
  • Testamentary Trust — created by a will, becomes active after death.

How a Trust Holds Title to Real Estate

When property is placed into a trust, title is recorded under the name of the trustee, such as:

“John Doe, Trustee of the Doe Family Trust”

The trustee manages the property, but the beneficiaries ultimately benefit from it.

Do Trusts Avoid Probate?

Yes — in most cases.

Property titled in a revocable living trust bypasses probate entirely. When the owner dies, the successor trustee transfers the home to beneficiaries without court involvement.

However, properties placed in a testamentary trust may still pass through probate first.

Trust Ownership vs. Sole or Joint Ownership

Trusts differ from standard ownership structures:

  • Sole Ownership: One person holds the title directly.
  • Joint Tenancy: Co-owners have survivorship rights.
  • Tenants in Common: Co-owners can hold unequal shares.

Trusts add an extra layer of control and flexibility for estate planning and asset management.

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