What instrument allows a trustee under a land trust to sell, mortgage, and subdivide real estate?

The correct answer is the deed of trust, which serves as a crucial legal instrument within a land trust framework. A deed of trust appoints a trustee to hold the legal title of the property, allowing that trustee to act on behalf of the beneficiary. This enables the trustee to perform significant actions such as selling, mortgaging, or subdividing the real estate, which reflects the functional purpose of a deed of trust in facilitating real estate transactions while ensuring that the interests of the beneficiary are protected.

In contrast, a power of attorney authorizes an individual to act on someone's behalf but does not necessarily confer title or the ability to handle real estate transactions in a formalized manner, which is vital in the context of a land trust. A lease agreement pertains specifically to the rental of property rather than ownership rights, making it unrelated to the transfer or modification of real estate titles. A land contract is primarily an agreement between a buyer and seller regarding financing terms, yet it does not grant any party the power to sell or subdivide the land in the same way a deed of trust does.

Understanding the role of a deed of trust is essential, as it underscores the legal mechanisms that facilitate real estate management and transactions within the context of a land trust.