How to Transfer a Living Trust to an Individual

By John Cromwell

Transferring a trust to an individual can mean one of two things. To execute a trust, its property must be transferred to the trustee. The other possibility is that the trust property can be transferred to a beneficiary after the trust is created. Trusts are subject to state law, so you want to check the law of the state where the trust is located to ensure that you are following the right procedure.

Transfer to Trustee

Step 1

Review the trust agreement to determine the identity of the trustee. The trust agreement is a written document that defines the terms of the trust, including the identity of the trustee.

Step 2

Obtain the ownership documents for the property you want to place in the trust. Real estate ownership documents are deeds. The ownership documents for personal property, such as cars, are known as titles. Some property, such as furniture, may not require any documentation to demonstrate ownership.

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Step 3

Record the transfer of the trust property to the trustee on the documents. This is done by writing on the ownership document “from [your name] to [name of trustee] as trustee for the [name of living trust] living trust.”

Step 4

Transfer the property to the trustee. For that property that does not require ownership documents, the mere physical transfer of the property to the trustee will suffice. For land transfers, you must record the new deed with the recorder’s office of the county where the property is located. The recording process varies by state. If you are transferring a car, you generally must register the transfer with the state where the car was located by submitting the signed title to the appropriate state office and paying a fee.

Transfer to Beneficiary

Step 1

Determine your reasons for transferring the property. Oftentimes with a trust the reasons a beneficiary needs the funds matter. Evaluate those reasons before initiating the process.

Step 2

Check the trust agreement. You want to determine if the trust is revocable or irrevocable. You also want to check to see under what terms the trustee is allowed to distribute the assets to you.

Step 3

Appeal to the creator of the trust if the trust is revocable. If the trust is revocable, the creator of the trust can change its terms of the trust. This includes the ability to pull the property from the trust and transfer it to you.

Step 4

Have the trustee transfer the trust property to the individual in accordance with the terms of the trust. If the trust agreement compels the trustee to distribute the assets to you whenever you request, there should be no problem. If the trust has a spendthrift clause, getting the trust’s assets may be more difficult. A spendthrift clause grants the trustee the ability to keep the assets in the trust if he believes the beneficiary would waste the property or use it to settle his own debts.

Step 5

Amend the irrevocable trust if the current agreement does not permit the trustee to distribute the assets to you. You can generally amend an irrevocable trust by getting all of the beneficiaries and the trust’s creator to agree to change the terms of the trust. If the creator of the trust is deceased or unavailable, the trust can still be amended with the consent of all of the beneficiaries and with the approval of an appropriate court. Secure the agreement of the beneficiary and trust creator in writing.

Step 6

Have the assets transferred to you after securing the necessary permission. Transfer any real estate by recording a deed in which the trustee grants ownership to you with the recorder’s office where the land is located. If the property is a car, be sure to record the new title with the appropriate state office. For all other property with titles, get copies of the titles with your name listed as owner. For the rest of the property, take physical custody of the items.

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How to Finalize a Living Trust
 

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