How to Transfer Property Held in a Trust

By Maggie Lourdes

Many people transfer real estate, vehicles, investments and personal belongings into trusts as part of their estate planning. Assets held in trust bypass probate when you die so they are transferred to heirs free of court costs and delays. A trust may be revocable, meaning its property can be transferred and managed before the trust maker dies. A trust can also be irrevocable, meaning transfers may not be allowed until the maker dies or other specific events occur.

Trust Terms

You must look at the specific language of a trust to determine if property transfers are permitted. For example, Bob and Mary have twin boys in grade school; they place their home in an irrevocable family trust and prohibit its sale if they die until their sons turn 21. Conversely, Sally and George have no children. They place their Florida beach house in a revocable trust for their siblings and leave them the power to make decisions regarding the sale or transfer of the property.

Transfer Documents

Proper documents must be used to transfer ownership of specific trust property. For example, deeds transfer real estate. Vehicle titles transfer cars and trucks, and the backs of stock certificates generally have designated spaces to sign and transfer stock ownership. Each state has its own technical requirements for conveying assets. For instance, ink colors for signatures, and notary and witness requirements can vary for property deeds. Attorneys can answer specific questions regarding preparing documents to transfer trust assets.

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Trustee Signatures

Trustees are the parties empowered with the authority to transfer ownership of trust assets. A trust may have one trustee or co-trustees, which is common with married couples. A trust's conditions may require co-trustees to agree to asset transfers, or they may allow co-trustees to act independently on behalf of the trust. A valid transfer requires a trustee to sign all necessary documents pursuant to the authority granted to him under the trust's terms.

Recording Documents

Some asset transfers are filed in state or county offices. For example, property deeds are generally recorded in the register of deeds for the county in which the property is located. Generally, vehicle transfers are processed at the department of motor vehicles. Other ownership transfers, such as a bill of sale for a lawn mower or appliance, do not require public filing. An attorney can answer specific questions regarding recording requirements for trust transfers.

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How to Transfer Property to an Irrevocable Trust in Pennsylvania

During the estate planning process, an individual known as the settlor may choose to establish and place select assets in an irrevocable trust. Upon the death of the settlor, an irrevocable trust generally conveys a portion of trust assets to beneficiaries named in the trust agreement with the remainder passing to future generations depending on the terms of the agreement. In Pennsylvania, as in other states, the intent is often to bypass the probate process and avoid any estate taxes that would be due if all assets went directly to devisees or beneficiaries under a last will and testament.

California Law Regarding Revocable Trusts

California residents who want to protect their assets from probate court can draw up a revocable trust -- also known as a living trust. The trust allows you to pass homes, investments and other property to your heirs. The term "revocable" means you can change the terms of the trust or revoke it altogether during your lifetime. Although the trust enables you to avoid probate, the assets are still subject to federal and California income taxes, as well as to estate tax.

Do Trusts Need to Be Notarized?

Whether a trust document needs to be notarized depends on its purpose and state law, but notarization is a requirement in many states. A notary public is commissioned by state or local governments primarily to certify signatures on documents ranging from wills and trusts to contracts. Beyond simply witnessing as you sign a document, the notary is charged with verifying your identity and making sure you are signing willingly and not under pressure.

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