A family member may have placed his property into a family trust as part of his estate planning process. Under the advice of his accountant, attorney or other professional or for a myriad of other reasons, he may have decided to remove the property from the trust or place the property, or a portion thereof, into a different trust.
Conveying to Settlors
If the settlors, or individuals making the trust, have decided to remove property from the trust and place it back into their individual names, the named trustees or their successors may execute a deed to the settlors if so authorized by the trust agreement. The trustees are often one and the same as the settlors, although another individual or entity may have been appointed. If the settlors decide to borrow money against property in the trust, the lender may require the property be deeded back into their individual names prior to making the loan. Consult an estate planning attorney prior to attempting to convey trust property to determine if the action is authorized under the terms of the trust agreement or state law.
Conveying to Trust
People who form a joint family trust may later decide, as part of additional estate planning, to create two separate marital trusts, one for the husband and another for the wife. The property that is in the joint family trust will likely be divided between the two marital trusts. In order to accomplish this, the trustee of the marital trust may deed the property to the husband and wife, individually, so they can subsequently convey it into their separate trusts. An attorney familiar with trusts should be consulted to determine if the terms of the joint trust agreement or state law allows such a transfer and its effect upon property ownership.
Conveying to Beneficiaries
Often a trust agreement will establish a qualifying event or date when the trust will terminate. Generally, as part of the termination of the trust, the trustee or successor trustee, as established under the agreement, will deed and convey all trust property to the named beneficiaries in the trust agreement.
Correcting Existing Deed
If it is determined at some point that the property was improperly described or the trustees under a family trust were improperly named in a deed, a correction deed may be necessary. The original settlors, or people who conveyed the property into the trust, as well as trustees of the trust who acquired title on behalf of the trust will likely be required to sign the deed and have their signatures properly notarized to effect the change. Upon proper completion and signing of the correction deed, it should be recorded in the real property records for the county where the property is located. Correction deeds are executed for the purpose of correcting errors only, not fundamentally changing the terms of the conveyance.