How to Transfer a Deed in a Living Trust

By Ronna L. DeLoe, Esq.

How to Transfer a Deed in a Living Trust

By Ronna L. DeLoe, Esq.

When planning for distribution of assets in your estate, you have different options to ensure your beneficiaries get your property. While many people get a will, your attorney can also create a living trust, also known as a revocable trust, for you. Some people have both wills and living trusts, although it's easier moving property in and out of a living trust than a will.

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Transfers into and out of Living Trusts

You must actually transfer or place property in the trust. That means the trust, with you as trustee, owns the property in it. The property remains in the trust for your use while you're alive. You can also take property out of the trust if your needs change or if you want to give it to your beneficiary.

To put your real estate in trust, you transfer the property's deed into the trust. The trust then becomes the property's owner.

Steps to Transfer a Deed into Your Trust

When you're putting property in trust, consider consulting an attorney so you have peace of mind that you're doing the transfer correctly.

1. Locate your current deed. Check to see whose names are on the deed and whether the deed is a warranty or quitclaim deed. A warranty deed assures you own the property free and clear of any liens. A quitclaim deed does not warrant free and clear title.

2. Use the proper deed. While transferring a quitclaim deed into the trust is easy, it's not the best deed to use. Unless you have a quitclaim deed owning the property, use a warranty deed to transfer title. Consult your attorney, as this step is important. Only use a quitclaim deed if your attorney advises you to do so. Otherwise, play it safe by using a warranty deed.

3. Check with your title insurance company and lender. Either the title company or the lender may require new title insurance, especially if there's a mortgage.

4. Prepare a new deed. Copy the names on your current deed to the new deed. You must now show the deed is in trust. If, for example, your deed shows ownership by you, Sally Smith, your new deed should read “Revocable Living Trust of Sally Smith, dated [fill in date]." Copy the exact wording of the property you're transferring.

5. Sign in the presence of a notary. Sign your name as “Sally Smith, Grantor and Trustee of the Revocable Living Trust of Sally Smith dated [same date as above]." Type this exact wording underneath your signature. Anyone named on the deed must sign the deed as grantor but not as trustee.

6. Record the deed in the county clerk's office. You may have to file a property transfer form in your clerk's office, depending on your state. Some states require you to record the deed in the land records office instead, so make sure you know where to file.

Steps to Transfer a Deed out of Your Trust

If you want to transfer your deed out of the trust—to yourself or to someone else—you follow a similar procedure.

1. Locate the deed that's in trust. This is the warranty deed you originally moved into the trust.

2. Use the proper deed. While using a quitclaim deed is easy, use a warranty deed instead. A quitclaim deed won't show that the trust owned title free and clear of any liens—even if you know it did—but a warranty deed will.

3. Check with your title insurance company and lender. The title company or lender may require new title insurance. There could be an issue if you have a due-on-sale clause, as the lender can ask for the remaining balance on the mortgage, so consult your attorney.

4. Prepare a new deed. After transferring the deed out of the trust, the deed is no longer owned by the trust. Show the name of the trust as grantor of the deed, but ensure that the new deed shows the grantee is an individual. Copy the exact wording of the property you're transferring. If you have questions, check with an estate attorney.

5. Sign in the presence of a notary. Sign your name as “Sally Smith, Trustee of the Revocable Living Trust of Sally Smith, dated [fill in date]." Type this exact wording underneath your signature.

6. Record the deed in the county clerk's office. Check to see if you need to file this in the land records office instead.

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