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Fiduciary Deed: Definition, Examples and More


Fiduciary deeds are just one of several types of deeds used in property transfers. This type is used to transfer property such as real estate when the owner can’t sign a deed for legal or other reasons. Fiduciary deeds are commonly employed when settling estates and the original owner of the property is deceased. Anytime a fiduciary deed is used, it is being granted by a fiduciary, such as an executor, who has the authority to sign in place of the owner. Learn what using this type of document can accomplish and its limitations.

Consider working with a financial advisor as you evaluate opportunities to buy, or sell, real estate.

Fiduciary Deed Uses

The role of the fiduciary is central to the operation of a fiduciary deed. The fiduciary is a person authorized to sign in place of the person or entity that owns the property. The fiduciary is required to act only in the best interests of the owner. A fiduciary deed is a key tool in a fiduciary’s toolkit.

Fiduciary deeds are often used to transfer property that was owned by someone who is deceased. An executor of an estate will typically act as fiduciary in this example. However, the owner of the property does not have to be deceased for a fiduciary deed to be useful. If the owner of the property is unable to sign due to illness or incompetence, a fiduciary may also be appointed and able to sign the fiduciary deed transferring the property.

A fiduciary deed may also be used if the owner of the property is a minor. In this case, the fiduciary is needed for a sale or other transfer because a minor’s signature on the documents has no legal force.

Another time a fiduciary deed is useful is when the property is not owned by a person at all. For instance, to allow a trust that owns property to sell or transfer it, it will require a fiduciary deed.

In order to be certain that the signer of a deed transferring property actually owns the property, buyers usually require a warranty deed. A warranty deed describes the amount of the interest that the owner has in the property and guarantees that the title can be transferred without any unknown liens or other claims to block it.

Fiduciary Deed Limitations

SmartAsset: Fiduciary Deed: Definition, Examples and MoreFiduciary deeds are one of several types of deeds that may be used to transfer ownership of real estate or other property. Other common sorts of deeds include grant deeds, quitclaim deeds, trust deeds and warranty deeds. Fiduciary deeds can transfer ownership of property when other deeds can’t, so they are useful tools. But they have limitations. One is that when fiduciaries signs fiduciary deeds, they are only attesting that they have the authority to sign. For instance, someone appointed to be executor of an estate typically has that authority. Likewise, a minor’s guardian is able to sign in place of the under-age owner.

However, the fiduciary deed doesn’t guarantee that the person the fiduciary is acting for actually owns the property or how much of an interest is owned. If a lien or other claim on the property such as a mortgage exists, that could block the transfer of ownership provided for by the fiduciary deed.

Like other types of deeds, the use of fiduciary deeds is determined by state law. That means there may be significant variations in the manner in which the deed is to be used and its limitations, depending on jurisdiction.

The authority of the fiduciary to sign the deed could potentially be questioned. In addition, there could be issues about whether the fiduciary is actually acting in the best interests of the owner of the property. In either case, this could cast a cloud over the validity of the fiduciary deed.

Bottom Line

SmartAsset: Fiduciary Deed: Definition, Examples and MoreFiduciary deeds are commonly used when settling estates or in any case where the owner of a piece of property cannot sign documents transferring ownership. In these cases, a fiduciary, such as an executor appointed to oversee the estate, can sign the fiduciary deed in place of the owner. While fiduciary deeds have limitations, they are can allow property sales to take place when the owner is unable to provide the necessary signatures.

Tips on Real Estate

  • If you are involved in acquiring or disposing of real estate or other property through the mechanism of as a fiduciary deed, consider working with an experienced financial advisor to help. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors who will help you achieve your financial goals, get started now.
  • If you’re wondering how much house you can – prudently – afford so that home buying doesn’t bust your financial plan, a free mortgage calculator can be quite useful.

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