Transferring Property From a Living Trust to a Successor Trustee

By Joe Stone

A successor trustee is named in a living trust as the person who will take over the trustee’s duties and fulfill provisions of the trust when the trustee dies. The transition process requires trust property to be transferred out of the trustee's name into the successor trustee's name. To do this, the successor trustee must review the trust document and prepare the necessary transfer documents for each type of property held in the trust.

Trust Document

A living trust is created by a document called a trust agreement or declaration of trust. This document is sometimes called a revocable trust or inter vivos trust. The person creating the trust document is called the settlor or trustor and is invariably named as the trustee. The trust document includes important information such as the name of the successor trustee; type of property included in the trust; duties of the successor trustee; name of trust beneficiaries; and how trust property is to be distributed to the trust beneficiaries when the settlor dies. The first step for any successor trustee is to locate the trust document and review its provisions for all of the foregoing information.

Real Property Transfers

Real property is commonly included in a living trust, such as the family residence, and must be transferred when the settlor passes away. For example, real property held in the trust is titled in the trustee's name as "John Smith, Trustee of the Smith Family Trust dated 2/1/2006." To transfer property to the name of the successor trustee, a form called "Affidavit of Death of Trustee" should be prepared and filed with the real property recording office in the county where the property is located. A form for this purpose is generally available from the local county law library. A separate affidavit must be filed for each real property title held in the trustee's name.

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Personal Property Transfers

Bank accounts, stocks and other items of personal property registered with a financial institution or other company and held in the trust are typically transferred to the successor trustee by a document called a Certification of Trust. The purpose of this document is to provide the financial institution or company with proof of the existence of the trust and successor trustee's authority under the trust, without providing a complete copy of the trust. A properly prepared certification must comply with applicable state law by including certain minimum information about the trust, such as the name of the settlor, when the trust was made and whether the trust is revocable or irrevocable. Financial institutions and other companies often provide their own certification form that meets the legal requirements.

Personal Property Not Registered

A settlor often includes in his living trust all his household furniture and furnishings as well as other personal property that does not ordinarily include a registered title. When the settlor dies, this type of property is transferred to the successor trustee when he takes possession of it. In situations where possession of the property can be acquired without controversy, the successor trustee should simply take possession. However, if other persons may interfere or frustrate the successor trustee's efforts, a court order will be needed to take possession of the property.

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How to Sign Documents As a Successor Trustee of a Living Trust
 

References

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Documents for Putting Property Into a Living Trust

Living trusts can be a powerful estate planning tool. Real property, business interests, automobiles, and other personal property can all be used to fund the trust, but the exact process can vary from state to state. In some cases, this requires executing a new deed or title, or filing other transfer documents. Knowing the appropriate state laws and paperwork required to place your property in a trust will help ensure that your property avoids probate.

How to Fund a Living Trust With Royalties

A royalty is the right to receive financial compensation for a body of work that is used by a third party. Common examples include songs played on the radio or packaged for sale, television advertisements, and books or articles sold. If the person who holds the right to receive royalty compensation wants to pass those rights at death, it is important to make such arrangements. A living trust is a common way to do so. Transferring assets into a living trust, a process called “funding,” is necessary for the assets to pass under the terms of the trust document.

How to Record a Trust Transfer Deed

Trust Transfer Deeds are used to create revocable living trusts. These legal devices transfer property a donor owns into the trust he creates. The donor would retain control of the property, as a trustee, and is subject to all relevant obligations of that position. Many states require that any documentation involving the transfer of real estate, including trust transfer deeds, be recorded at the local recorder’s office. The recorder’s office is the centralized location for a county’s public records.

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