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Home Title Theft and Trust Planning

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Home Title Theft and Trust Planning


By Libby Banks, the Law Office of Libby Banks, PLLC

The news is often filled with stories about fraud. One of the areas of current concern I often hear about is title theft. What is title theft? It can take many different forms. Someone might fraudulently refinance your home to steal your equity, pocketing your hard-earned money. Similarly, they may access the equity with a home equity line of credit. They may even forge a deed and sell your property to an unsuspecting buyer, leaving both of you in a legal and financial mess. If you are in the process of buying or selling a home, a criminal might provide fake wiring instructions so the payment for the home goes to a fake title company – and the thieves are off with your money.

How can we protect against this title fraud? We recently got a little help with that. The Maricopa County Recorder has set up a program to alert you if a document is being recorded that might affect your title. You can sign up to be notified by email with Title Alert. You enter your name into the alert system at https://recorder.maricopa.gov/MaricopaTitleAlert/. The system notifies you based on name, not on the specific property, so if you have a common name, you may get lots of alerts. I highly recommend using this to keep on top of what might be happening with your title. Pinal County has a similar alert, but our other counties have not yet put in place an alert system. However, there is a state law requiring all of Arizona’s counties to offer similar alert services by 2025, so keep an eye out for updates if you own property in other areas of the state.

I also get the question about whether holding your house in trust could help prevent fraud. And similarly, clients ask about whether a rental property held in an LLC is better protected from title fraud than one held by an individual?

For most fraudsters, the easier it is to defraud you, the better for them, and the more likely they are to try. Reversely, the more complications or roadblocks you put in their way, making it harder to defraud you, and increasing the risk of getting caught, the less likely they are to go after your home.

Having your home title in your trust does add many complications for someone looking to steal your title or defraud you. It takes a higher level of sophistication to commit fraud regarding that property than on a home in an individual’s or couple’s name.

When the title is in an individual’s name, the criminal only needs to sign the name to forge a deed or loan document. If the home is in a trust, they must provide proof that the trustee has the authority to take out the loan or transfer the property. Sometimes the title company or lender will ask for the entire trust document. Faced with these additional requirements, a fraudster would quickly decide to move on to pursue a fraud on a property offering fewer difficulties.

Likewise, a fraudster stealing or financing a property in an LLC must again show that they are authorized to act. The lender should be checking the State records to determine who owns the LLC, who is the manager, and asking for documents showing the authority of each person to act. The criminal is again likely to move on to an easier target if you have an LLC as a stumbling block.

A trust is a great way to manage your property while you are living, assure that you have the right people in place to take over if you are incapacitated, and to avoid probate and provide specific directions for your estate on your passing. If you’ve been thinking about putting a trust in place, the possibility that it may help prevent fraud is just one more reason to move forward.

The Law Office of Libby Banks, PLLC focuses its practice on trusts, wills and estate planning, and on probate proceedings and assistance with trust administration. Our attorneys, Travis Meyers and Libby Banks offer a free initial consultation to talk about developing an estate plan for you. Call us at 602-375-6752 to schedule your free initial consultation.

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