Bulletin: WY000012

Date:
June 25, 2003
To:
All Issuing Offices in Wyoming
RE:
Wyoming's New Uniform Trust Code

Dear Associates:

Effective July 1, 2003, the Wyoming Legislature enacted HB 0077, creating the Uniform Trust Code, concerning to trust ownership and the transfer of trust property. This Bulletin addresses the effects of these statutory changes when insuring title to real property. 

CONVEYANCES INTO A TRUST

InWyoming, conveyances into the name of the trust or trustee of the trust must meet certain requirements.  W.S. 34-2-122 sets forth the proper way to convey title into a trust or trustee of a trust.  In all instruments conveying an interest in real estate into to a trust, as grantee, Wyoming statutes provide that as a minimum you must define a trust by providing in the text of the instrument the name of the trustee or trustees and the name of the trust, the date of the trust or other agreement, or by referring by proper description to the record book, page, document number or file, recorded in the county in which the land is located or to the instrument, order, decree or other writing, which is of public record in the county in which the land so conveyed is located and in which the required information appears. The real property interest is conveyed to the grantee personally where the instrument fails to meet these requirements.

A.  EXAMPLES OF PROPER CONVEYANCE INTO A TRUST: 

(a)  *Grantee: Smith Family Trust dated December 22, 1968; or
(b)  *Grantee: Smith Family Trust recorded in Book 9, Page 99, as Document or File No. 9999 recorded in the county in which the land conveyed in located; or
(c)  *Grantee: Smith Family Trust referred to in instrument, order, decree or other wiring of public record in the county in which the land conveyed is located in which such matter appears.
*Title is deemed to have vested in the trustee or trustees of the trust.

B.  EXAMPLES OF PROPER CONVEYANCE INTO TRUSTEE FOR TRUST: 

(a)  *Grantee: Mary Smith and Henry Smith, as Trustees for the Smith Family Trust dated December 22, 1968; or
(b)  *Grantee: Mary Smith, as Trustee for the Smith Family Trust recorded in Book 9, Page 99, as Document or File No. 9999 recorded in the county in which the land conveyed in located; or
(c)  *Grantee: Mary Smith, as Trustee for the Smith Family Trust referred to in instrument, order, decree or other wiring of public record in the county in which the land conveyed is located in which such matter appears.
*Title is deemed to have vested in the trustee or trustees of the trust.

The description of a grantee in any representative capacity in each instrument of conveyance is considered to be a description of the grantee only and is not notice of any trust, agency or other representative capacity.  Therefore, the named individual would sign any subsequent conveyance or encumbrance.

C.  EXAMPLES OF CONVEYANCES INTO THE PERSON INDIVIDUALLY:

Grantee: Mary Smith, Trustee for the ABC Trust
(a)  Grantee: Mary Smith, Trustee
(b)  Grantee: Smith Family Trust

The statute does provides for the recording of a curative affidavit that either refers to the proper description of the representative capacity of the grantee and meets the other requirements of W.S. 34-2-122 or refers to the proper description of an instrument of public record in the county in which the matter appears as set forth above.  W.S. 34-2-123.  Upon recording of the Affidavit in the county in which the land is situated, all persons have notice of the grantee's representative capacity and you may treat the grantee in the conveyance as a trust. 

COMPANY POLICY: In order to be a proper conveyance of real property to a trust or trustee of a trust, the instrument of conveyance must comply with one of three requirements:  (1) The instrument of conveyance, which names a trust or the trustee of the trust, as Grantee, must also properly identify the trust by name and date of execution of the trust instrument;  (2) The instrument of conveyance, which names a trust or trustee of a trust, as Grantee, must reference the recording information for the trust instrument in the county in which the land conveyed in located;  Or, (3) The instrument of conveyance, which names a trust or trustee of a trust, as Grantee, must make reference to an instrument, order, decree or other wiring of public record in the county in which the land conveyed is located in which such matter appears.  If one of these requirements is satisfied, you may treat the grantee in the conveyance as a trust.  If one of these requirements is not met, you must treat the owner of the property as an individual, not as a trust.

CERTIFICATION OR AFFIDAVIT OF TRUST

The Trustee of a trust may furnish a certification or affidavit of trust containing information that: (1) the trust exists and the date the trust was executed; (2) the identity of the settler; (3) the powers of the trustee; (4) the revocability or irrevocability of the trust and the identity of the persons entitled to revoke; (5) the authority of co trustees to sign or otherwise authenticate; (6) the trust's taxpayer identification number; and, (7) the manner of taking title to trust property.  W.S. 4-10-1014.  The certification or affidavit of trust may be signed or authenticated by any trustee.  Any person in receipt of a certification or affidavit of trust may require the trustee to furnish copies of those excerpts from the original trust instrument and later amendments which designate the trustee and confer the power to act in the pending transaction upon the trustee.  Any person who acts in reliance upon a certification or affidavit of trust without knowledge that the contents are incorrect is not liable to any person for acting in reliance on the certification or affidavit.

COMPANY POLICY: Whenever possible, obtain a signed certification or affidavit of trust from any trustee of a trust.  Be sure to record the trust affidavit or certification to provide notice that trustee(s) can act on behalf of the trust.  In addition, we always obtain and review the Trust Agreement in order to determine whether a trust can acquire, convey, encumber, lease or otherwise deal with real property and to confirm the authority of the trustee or trustees to engage in and bind the trust to a particular transaction involving real property. 

ORAL TRUST

The Wyoming Trust statute does not require that a written instrument evidence a trust.  However, the creation of an oral trust and its terms must be established by obtaining clear and convincing evidence.  W.S. 4-10-408. 

COMPANY POLICY:  Although the Wyoming Trust statute recognizes oral trusts, insuring title based on an oral trust is hazardous.  Therefore, we must require and review the Trust Agreement to determine whether a trust can acquire, convey, encumber, lease or otherwise deal with real property and to confirm the authority of the trustee or trustees to engage in and bind the trust to a particular transaction involving real property.

POWER OF ATTORNEY

The power of modification and distribution of trust property may be exercised by an agent under a power of attorney only if expressly authorized by the terms of the trust or the power of attorney.  W.S. 4-10-602(e); W.S. 4-10-412(a).  Additionally, a trustee may delegate to an agent the duties and powers that a prudent trustee of comparable skills could property delegate under the circumstances. W.S. 4-10-807.

COMPANY POLICY: Prior to insuring a transaction based where the settler or trustee of a trust has delegated powers to an agent through a Power of Attorney, you must obtain and review the Power of Attorney and the Trust Agreement to determine whether the terms of these instruments expressly authorize the trustee or settler to delegate to an agent the power to convey, encumber or otherwise deal with real property.  If the terms of the Power of Attorney and Trust Agreement do not expressly authorize the delegation of authority and power to an agent, we will not insure the transaction based upon acts executed pursuant to a Power of Attorney.

CONFLICT OF INTEREST

A sale, encumbrance or other transaction involving the investment or management of trust property is presumed to be affected by a conflict between personal and fiduciary interests if entered into by a trustee with the trustee or trustee's spouse; the trustee's descendants, siblings, parents or their spouses; an agent or attorney of the trustee; or a corporation or other person or enterprise in which the trustee or a person that owns a significant interest in the trustee has an interest that might affect the trustee's best judgment.  W.S. 4-10-802(c).

COMPANY POLICY: If you discover a transaction between the trustee of a trust and any of the above relationships or any other potential conflicts of interest, you must check with Underwriting before going forward with the transaction.

This memorandum is intended to provide general information on new statues affecting title insurance in Wyoming . As additional issues or questions arise regarding specific procedures to be followed in each case, please don't hesitate to contact your Stewart Title Guaranty Company underwriting personnel.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
None
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None