When You Can’t Trust a Trust
Why You Should Always Hire an Attorney When Buying or Selling a Home out of a Trust or Estate
Buying or selling a home is an incredibly exciting process. After all, it is often one of the biggest purchases one will make, and is often the most valuable asset in a person’s net worth. Unfortunately, the process of buying or selling a home does not always go smoothly. A recent decision by the Wisconsin Court of Appeals in Parks v. Wucherer is one of many cases that demonstrate why you should always hire an attorney when buying or selling a home in a trust or estate.
In 2017, the Parkses purchased a home from the Wucherer Trust. Throughout the transaction, the Parkses dealt exclusively with Robert Wucherer. The Parkses even received a Real Estate Condition Report from Robert stating that the home was free of all defects. However, shortly after purchasing the home, the Parkses discovered that the basement had serious leaking problems. The Parkses sued the Trust and Robert as the trustee, claiming breach of contract and misrepresentation claims.
The court dismissed the Parkses’ claims because Robert did not have the authority to sell the home. The title commitment listed the owners as William and Patricia Wucherer, or their successor, as trustees of the Trust. This means the home was actually owned by the Trust. When a home is owned by a trust or estate, only certain individuals, as named in the trust or estate documents, have the authority to sell it. If the owner of the home left a will after passing away, the personal representative is the individual with the power to distribute the assets of the estate, including real estate. If the property is in a Trust, the trustee holds that same power. In this case, William Wucherer was the sole trustee until his son, Daniel, took over as the successor trustee. William’s other son, Robert, was never named as a trustee and had no role in administering the trust at any time during relevant events of the case. Daniel was the only one with the authority to sell the home to the Parkses, but he had no contact with the Parkses. Instead, Robert sold the home to the Parkses, despite having no power or authority to do so.
The case between the Parkses and the Trust arose even though a title company was utilized. In a closing, a title company is involved in the production of closing documents and the review of the trust or will when dealing with a buyer or seller who is acting on behalf of the trust or estate. However, hiring an attorney to review documents during a home sale or purchase provides additional protection. An attorney’s job is to ensure that all paperwork is correct and there are no post-closing issues. We have witnessed first-hand the types of problems and unnecessary costs that may arise after closing as a result of something in the real estate documents being overlooked or lack of attention to detail. Unlike a title company, an attorney’s goal in this scenario is to protect their client as the buyer or seller, and to ensure their client walks away from the transaction without legal issues coming up after closing, which could cost additional money to litigate.
Ultimately, the Parkses appealed their case, arguing that the Trust should be liable for Robert’s actions. However, the court of appeals held that the Parkses failed to present any evidence showing that Robert acted as an agent of the Trust. The Parkses did not receive any reimbursement for the leakage issues in the basement, nor any compensation from Robert or the Trust.
Buying a home from a trust or estate may seem intimidating, but hiring the right attorney can protect you from potential liability and give you peace of mind. The attorneys at Axley have extensive experience and knowledge with trust and estate administration, as well as trust and estate litigation, giving us an advantage in detecting and alerting clients to red flags when buying and selling homes in the name of a trust or estate.