Declaration of trust vs trust agreement

[Prodedge2022]

Jurisdiction

Colorado

My husband and I have a revocable living trust and transferred our home to the trust last year. The mortgage on our house was paid off 5 years ago. We requested a small loan (Heloc) through our bank last week. They requested our living trust in addition to other paperwork. Now they say that the trust should say "Trust agreement" and not the "Declaration of Trust"!! So, what is the difference between these 2 terms and do we need to redo our trust? Thank you!

 

[adjusterjack]

Did you create the trust prior to 2018?

If yes, CO enacted a Uniform Trust Code in 2018.

You may have to update it anyway. Consult a trust attorney.

 

[Prodedge2022]

Did you create the trust prior to 2018?

If yes, CO enacted a Uniform Trust Code in 2018.

You may have to update it anyway. Consult a trust attorney.

Thanks for your response. No, we created it last year (2021).

 

[Tax Counsel]

My husband and I have a revocable living trust and transferred our home to the trust last year. The mortgage on our house was paid off 5 years ago. We requested a small loan (Heloc) through our bank last week. They requested our living trust in addition to other paperwork. Now they say that the trust should say "Trust agreement" and not the "Declaration of Trust"!! So, what is the difference between these 2 terms and do we need to redo our trust? Thank you!

That difference in the title of the document means nothing. It's the body of the agreement, the actual terms of it, that really matters. You are probably dealing with a loan assistant rather than a lawyer at the bank, and that assistant is probably just following some pattern documents they have as reference as to what they should be looking for. If the complaint is only about the title of the document ask the person at the bank to contact their legal department for an answer as to (1) why the title matters and (2) what real effect changing the title would have when the terms are unchanged. You should get an answer that it really doesn't matter.

 

[Zigner]

That difference in the title of the document means nothing. It's the body of the agreement, the actual terms of it, that really matters. You are probably dealing with a loan assistant rather than a lawyer at the bank, and that assistant is probably just following some pattern documents they have as reference as to what they should be looking for. If the complaint is only about the title of the document ask the person at the bank to contact their legal department for an answer as to (1) why the title matters and (2) what real effect changing the title would have when the terms are unchanged. You should get an answer that it really doesn't matter.

Further to this, it would appear that "Declaration of Trust" is actually the correct wording, although, as you pointed out, it likely wouldn't matter.

 

[Prodedge2022]

That difference in the title of the document means nothing. It's the body of the agreement, the actual terms of it, that really matters. You are probably dealing with a loan assistant rather than a lawyer at the bank, and that assistant is probably just following some pattern documents they have as reference as to what they should be looking for. If the complaint is only about the title of the document ask the person at the bank to contact their legal department for an answer as to (1) why the title matters and (2) what real effect changing the title would have when the terms are unchanged. You should get an answer that it really doesn't matter.

Thank you so much! This is very helpful. The email came from the loan processor after sending our trust to their legal department!!! Their processing and legal department are in a different state, so my husband thought that they are following a set guideline for all states and may not apply to Colorado! At this point, it is more a hassle to deal with their required paperwork for a very small loan than pulling money out of our investments!

 

[adjusterjack]

At this point, it is more a hassle to deal with their required paperwork for a very small loan than pulling money out of our investments!

Personal comment, not legal advice.

When it comes to a choice of borrowing money and using my investment money, using my investment money won hands down every time.

I worked hard to save up that money so that I could enjoy a debt free life after having 20 years of grief from mortgage industry vultures.

Wouldn't surprise me if they turn around and want you to deed the home to yourselves as individuals to get the loan.

 

[Prodedge2022]

Personal comment, not legal advice.

When it comes to a choice of borrowing money and using my investment money, using my investment money won hands down every time.

I worked hard to save up that money so that I could enjoy a debt free life after having 20 years of grief from mortgage industry vultures.

Wouldn't surprise me if they turn around and want you to deed the home to yourselves as individuals to get the loan.

First of all, I am so happy that I found this website. So much great information.

I agree with you about being debt free. Our only debt for the last 30 years have been our mortgage that was paid off 5 years ago. Kids even graduated with 3 degrees debt free. We just didn't want to touch our investments because the market is down. We are still 10 years away from retirement. We thought the HELOC will be useful to get cash fast (for our kid's grad school) and pay it off within 2-3 months. I guess this is too much information for these forums, but felt that I needed to answer.
"Wouldn't surprise me if they turn around and want you to deed the home to yourselves as individuals to get the loan" Not going to happen. In that case, no HELOC for us.

 

[adjusterjack]

We thought the HELOC will be useful to get cash fast (for our kid's grad school) and pay it off within 2-3 months. I guess this is too much information for these forums, but felt that I needed to answer.

I'm glad you did provide that information because it puts things in perspective. If it's a small loan that you can pay off in 2-3 months out of income, then it isn't such a bad idea after all.

As for the market being down, I'm also feeling the pain and I'm holding on for the inevitable recovery. But that wouldn't (and didn't) stop me from taking out a chunk now and then to do things that please me.



By the way.

Our only debt for the last 30 years have been our mortgage that was paid off 5 years ago.

Didn't that feel good.

I've been mortgage free since 1998 and I still feel the euphoria every month when I don't have to write a check to the mortgage vultures.

 

[Prodedge2022]

I'm glad you did provide that information because it puts things in perspective. If it's a small loan that you can pay off in 2-3 months out of income, then it isn't such a bad idea after all.

As for the market being down, I'm also feeling the pain and I'm holding on for the inevitable recovery. But that wouldn't (and didn't) stop me from taking out a chunk now and then to do things that please me.



By the way.



Didn't that feel good.

I've been mortgage free since 1998 and I still feel the euphoria every month when I don't have to write a check to the mortgage vultures.

Hope you had fun with the money you took out. Life is too short to not enjoy today. I would have done the same.
I am impressed, mortgage free since 1998! Wow!
I think we bought our house in 1999, so it took us about 18 years to pay a 30-year mortgage off. I finally felt what freedom feels like.

 

[adjusterjack]

I think we bought our house in 1999, so it took us about 18 years to pay a 30-year mortgage off.

Now I'm impressed. That took a lot of self-discipline.

I finally felt what freedom feels like

It's a pretty big club that we belong to. 37% of homes in the US are mortgage-free. 68% of adults 70 and older are mortgage-free.

 

[Prodedge2022]

Now I'm impressed. That took a lot of self-discipline.



It's a pretty big club that we belong to. 37% of homes in the US are mortgage-free. 68% of adults 70 and older are mortgage-free.

Thank you! Yes, it was hard for a few years, but it was the best financial decision we have made.
Wow! It is sad to see that so many people over 70 haven't paid their mortgage yet!

 

[adjusterjack]

Wow! It is sad to see that so many people over 70 haven't paid their mortgage yet!

I'm sure that there are people who are mortgaged for life because of income and career limitations.

But there are many that can pay off their loans, but don't want to.

Over at City-Data there are financial forums where there is an eternal argument between two factions.

One faction prefers to be debt free and accumulate investment wealth. That's where you and I live.

The other prefers to invest while being in debt, believing that their investments can produce a greater return than the interest they pay on their debts. It's a popular investment scheme called OPM (Other People's Money) and I guess it works for them.

Not for me, though. That kind of thing makes me nervous.

 

[zddoodah]

Now they say that the trust should say "Trust agreement" and not the "Declaration of Trust"!! So, what is the difference between these 2 terms and do we need to redo our trust?

The trust agreement is exactly that. A declaration of trust is a short form document that identifies the trustees of the trust and some of the salient terms. It's sometimes used when dealing with third parties, but the third party is always entitled to require the actual trust instrument.

 

[Zigner]

The trust agreement is exactly that. A declaration of trust is a short form document that identifies the trustees of the trust and some of the salient terms. It's sometimes used when dealing with third parties, but the third party is always entitled to require the actual trust instrument.

What you are referring to as a "declaration of trust" is generally referred to as a "certification of trust". The trust instrument itself certainly may be titled "Declaration of Trust".

 

[Red Kayak]

We thought the HELOC will be useful to get cash fast (for our kid's grad school) and pay it off within 2-3 months.

Kids should pay for grad school themselves. Or, more accurately, find someone other than parents to foot the bill.

It's called adulting.

 

[Tax Counsel]

Kids should pay for grad school themselves. Or, more accurately, find someone other than parents to foot the bill.

Each family does things a bit differently. What's right for you may not be for someone else. There is nothing inherently wrong with a parent who has the means paying for some or all of his/her kid's college education, including grad school. While I think it's good for kids to pay at least part of the bills to put some of their own investment into it, having the parents contribute to avoid what could otherwise be overburdening student loans is not a bad thing, IMO. Graduate education today, even at public universities, is so expensive that it deters people who might really be good candidates for advanced degrees from pursuing them. It's one of the reasons why the U.S. isn't top of the list in many advanced areas anymore. In short, I'd not be so quick to judge the decisions of others on this, especially when I don't know the details of their situation.

 

[Red Kayak]

Graduate education today, even at public universities, is so expensive that it deters people who might really be good candidates for advanced degrees from pursuing them.

You can chose your graduate school based on who gives you the best deal. That's what I did. I observed that those who didn't get a full TA ship as new graduate students usually were also not up to the program's rigor. Yes, many of my American classmates took on additional student loans. Student visas are only granted if the student has sufficient financial support. For students not from 1st world countries, that support usually comes from their academic program.

And there are other ways to pay for advanced degree, if you are pursuing a professional degree. For example, there are programs through the military - that's how one of my siblings paid for med school.

 

[Prodedge2022]

Each family does things a bit differently. What's right for you may not be for someone else. There is nothing inherently wrong with a parent who has the means paying for some or all of his/her kid's college education, including grad school. While I think it's good for kids to pay at least part of the bills to put some of their own investment into it, having the parents contribute to avoid what could otherwise be overburdening student loans is not a bad thing, IMO. Graduate education today, even at public universities, is so expensive that it deters people who might really be good candidates for advanced degrees from pursuing them. It's one of the reasons why the U.S. isn't top of the list in many advanced areas anymore. In short, I'd not be so quick to judge the decisions of others on this, especially when I don't know the details of their situation.

Thank you for understanding! This is exactly how we feel.

Kids should pay for grad school themselves. Or, more accurately, find someone other than parents to foot the bill.

It's called adulting.

LOL! You have no idea what our situation is, so please don't assume to know it!

 

[justblue]

A trust agreement is a lawful certificate that permits the trustor to shift the holding of properties to the trustee to be released for the trustor's inheritor.


Declaration of trust is an event of any trustee terminating to be a Trustee because of resignation, death, and mental or physical incapacity. The remaining trustees shall have the capability to nominate another person in his place as trustee, and on such selection, all the Trust Fund will place in him along with other trustees.

Why are you posting definitions to a thread that is 6 weeks old, OP was advised and has not returned for a month and a half?

Please don't post to older threads...especially ones that are resolved