A trust is a separate entity that can hold assets on your behalf, and an inter vivos trust, created while you're alive, can be a useful way to have control and flexibility over your assets. Many people choose to put a house into a trust as part of their estate plan so their future beneficiaries can easily receive the property without the messiness of probate (which can be required if you give away assets through a will).
The process of transferring real estate into a trust is fairly straightforward and consists of creating a new deed that changes ownership of the property to the trustee and name of the trust. You can also fund the trust with other assets, like cars and boats, in the same manner.
1. Find the original property deed
A deed is a document that shows ownership of a piece of land or real estate, formally known as real property. Before you start transferring assets into the trust, you should find the original deed of the house to make sure you own the property and there are issues with ownership, like a cloud or defects on the title. You don't want to transfer property you don't actually own, which could complicate things for your future trust beneficiary who eventually inherits the property.
2. Get a new deed
You can make a new deed by copying the old one and updating the necessary information. You can also use an online legal service or have a lawyer prepare it for you — which might be your best option since they can make sure you use the right type of deed (whether it’s a warranty deed or a quitclaim deed).
Learn how to find an estate planning attorney.
The new deed, regardless of type, should have the some of the same key information as the original, including:
Legal description of the property
Name of the new owner: [Trustee's name], trustee of the [trust name]
When retitling property, you can use the name found on your trust document, and it may look something like this: "Jane Smith, trustee of Smith family trust."
Read more about trustees.
3. Notarize the form
You and any other current owners of the property who are transferring the property into the trust need to sign the deed in front of a notary public who will stamp it with their seal. Notarizing a document helps make it legally valid and ensure that everyone is who they claim to be.
Find out how much a notary costs.
4. File the new deed with the proper office
The final step of transferring real estate into your living trust is to file the deed transfer with the local office that keeps property records. (It may be the recorder's office, county clerk’s office, land records office, or something similar.) If you don't file the deed, then there will be no official record of the transfer.
It's typical that the county will charge a recording fee.
Other considerations when transferring real estate
Here are a few other things to know about transferring real estate into your trust:
Mortgaged property
The terms of a mortgage, including a due-on-sale clause, shouldn't typically be affected when you transfer property into a living trust, but you will likely need to let the loan servicer know so they can change the paperwork to reflect the trust’s name.
Home insurance and title insurance
You'll need to contact the insurance companies to update the policies to have the name of the trust and trustee. The terms of your home insurance — including the premiums — shouldn't change either when you retitle the property into the living trust if all else stays the same (like the person who lives there).
Irrevocable trusts
This type of trust can't be changed or revoked, so know that once you transfer real estate into the trust it may be difficult to retitle it back in your name or someone else's. However, irrevocable trusts can offer you tax benefits and asset protection as the grantor, since you’re no longer the legal owner of any trust property.
Learn more about irrevocable trusts and whether one is right for you.
