Q: Revocable Trust in Maryland. Amicably divorcing couple with executed Separation Agreement, waiting for court date.
co trustees currently. Issues with home being under trust and dealing with Title transfer prior to divorce being final. One spouse buying out the other. Lender wrote $500k check to name of the Trust. Bank won’t deposit in trustees personal account to complete buyout without setting up new bank account. Is one of trustees drafting letter resigning from trust sufficient to permit other trustee to deposit in a personal account rather than trust?
A: If the trust is the seller of the property, the sale proceeds need to be paid to the trust, not the personal account of an individual trustee. The trust then can distribute the agreed buyout amount to whomever is supposed to receive it. You will need a lawyer to look at the trust instrument and your separation agreement to determine what needs to be done and how best to structure the transaction. The spouse being bought out of a marital property ordinarily would receive their check directly at settlement, but if neither spouse is on the deed, then the transaction is a bit more complicated. Without seeing your documents, it is unclear whether providing copies of the trust instrument and your marital settlement agreement to the settlement attorney, plus any other authorizations from the trustees, would ennable them to write a personal check to the spouse being bought out.
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