Certification of Trusts (AYU August 2023)
Question: Are all trusts the same?
Answer (from Counsel Jon W. Brodegard): No. Read on for more info.
Real property may be subjected to many different types of trust arrangements. These include, but are not limited to:
- Estate Planning trusts governed by Virginia’s Uniform Trust Code (Code § 64.2-700 et seq)
- Testamentary trusts
- Business trusts
- Land trusts authorized under Code § 55.1-117
- Situations where property is held as part of an investment portfolio, such as a self-directed IRA.
It is important to distinguish between the different types of trusts because each requires a different underwriting approach.
Q: Why does it matter if the trust is governed by the Uniform Trust Code?
A: The Uniform Trust Code does not apply to all trusts. If the Uniform Trust Code does not apply, then the trust should be analyzed under the code sections or other authorities that do apply. For example, consider the Certification of Trust authorized under the Uniform Trust Code*, while a Certification of Trust may be relied upon to establish the powers of the trustee of a trust subject to the Uniform Trust Code, the Certification of Trust may not be used to establish the powers of trustees of trusts that are not governed by the Uniform Trust Code.
Q: Which types of trusts are governed by the Uniform Trust Code?
A: The first section of the Uniform Trust Code identifies which trust arrangements or agreements are governed by the Uniform Trust Code and, as importantly, trust arrangements that are not governed by the Uniform Trust Code. Most living trusts and other revocable or irrevocable trusts made for estate planning purposes are governed by the Uniform Trust Code, as are testamentary trusts. Business trusts, land trusts, and arrangements or agreements regarding property held as part of an investment portfolio are not governed by the Uniform Trust Code.