- May 18, 2011
- All Arkansas Issuing Offices
- Homestead Property Conveyed to Revocable Trust
A decision by the Supreme Court of Arkansas in Mary D. Fitton, As Trustee of the Mary D. Fitton Revocable Trust vs. Bank of Little Rock, No. 09-1273, dated June 3, 2010, ruled that a married person with a beneficiary interest in a property that is maintained as their principal residence is entitled to a homestead exemption, even though title to the property is held by a revocable trust. In that case, the Court found that Mary Fitton was the settlor (trustor), the trustee, and also one of the beneficiaries of the trust. The property was her principal place of residence. The Court held that she did not abandon her right to homestead when she conveyed her interest to a revocable trust, and she was entitled to a homestead exemption.
Based upon the above decision, we will require the following when insuring residential property held in a trust.
A. The trustee must always execute the deed, deed of trust or mortgage.
B. Determine if the property is the principal residence of any person who is also a beneficiary of the trust. You may rely upon an affidavit from the trustee stating that the property is not the principal residence of any person who is a beneficiary of the trust, if applicable. This statement can be added to a closing affidavit.
C. If the property is the principal residence of any beneficiary of the trust, that person and their spouse must also sign the deed, deed of trust or mortgage, individually.
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