BIC TIP #1300: Who Needs to Sign This? Trusts, Estates, and LLCs
Tip number 1,300! That is 1,300 little tidbits to help brokers and consumers make better decisions, and Stephen Long, your Notorious BIC, marks the milestone with a question he hears constantly: who needs to sign this? When you are working with trusts, estates, or LLCs, getting the right signature on the listing agreement, buyer agency agreement, or contract matters a lot.
Trusts: The Trustee Signs
When the owner or buyer is a trust, the trustee is the signer. Not the beneficiary. Not the person who will eventually receive the money from the trust. The trustee is the one with authority to act for the trust.
This trips up brokers when a family member who stands to inherit is the one doing all the talking. They may be your main point of contact, but if they are not the trustee, they are not the one signing.
Estates: Defer to the Attorney
Estates can be very complex. There can be multiple heirs, and their spouses may need to be involved. There may be someone with authority to sell real property on behalf of the estate. The problem is that you, as a broker, do not know these things, because you are not an attorney.
Stephen always defers estate signature questions back to the attorney handling the estate. Let them tell you who needs to sign, then follow their guidance. Guessing here can derail a closing.
LLCs: Member Managers With Authority
With an LLC, any member manager can typically sign on behalf of the company. You usually do not need every member to sign, so long as the person signing is a member manager and has the authority to buy or sell real property on behalf of the LLC.
If there is any question about authority, ask for documentation or have the closing attorney weigh in early.
The Practical Takeaway
Before anyone signs a listing agreement, buyer agency agreement, or contract on behalf of an entity, confirm who actually has authority. Trustees sign for trusts. Estates go through the attorney. Authorized member managers sign for LLCs. Getting it right at the start saves a whole lot of trouble at the closing table. Here is to the next 1,300.
