Transferring Real Estate Into Your Trust.

Think of your Living Trust as a fish bowl -- what's swimming in there is part of the trust.  It is an awkward analogy, but if the "fishies" aren't in there -- the trust does not own any assets. You want the trust to own assets so the successor trustee can manage those assets if something happens to you. Otherwise if your trust does not own any assets, it is useless.

To have your real estate owned by your trust, it requires that you actively transfer ownership of your real estate to the trust.

The way to accomplish this is to prepare a trust transfer deed, grant deed or quitclaim deed (I prefer a trust transfer deed) to transfer title from you as a person to you as trustee of your Living Trust. Then if something happens to you, your successor trustee will be able to take over and manage the real estate in the trust on your behalf and in accordance with the trust document.

Here's how this works:

You own your home in Long Beach. It's titled as John Smith as a single man. You set up a John Smith Revocable Trust dated July 1, 2006.

To transfer this Long Beach home to your trust, you will type up a trust transfer deed granting your home from:

John Smith, a single man to John Smith, Trustee of the John Smith Revocable Trust dated July 1, 2006.

Once you record the deed with Los Angeles County Recorder's Office (where your Long Beach home would be recorded, homes located in other California counties would go to their county recorder's office), the home is officially transferred into your trust.

The trust transfer deed must contain other information such as the mailing address for property taxes, whether any documentary transfer tax is owed (here, for a trust transfer there is no tax owed) and a few other particulars.

You also need to prepare a Preliminary Change of Ownership Report to avoid an additional $20 filing fee to accompany your trust transfer deed at the time of recording.

If you refinance, take out a second mortgage, obtain a reverse mortgage or otherwise change the encumbrances on the real estate in your trust, it may have been taken out of the trust during this time. You need to ensure that the real estate is transferred back into the trust after the financial transactions involving your real estate have been completed. This may mean doing this trust transfer deed process all over again.

As always, talk to an attorney if you have questions or need assistance with your Living Trust.

Comments

[Richard]

I am the sole survivor of my Mother's Irrevocable Living Trust. My Mother just passed away and I'm in the process of closing out her trust and transferring the assets into my Irrevocable Living Trust. How do I transfer the Real Estate (her single family residence) left to me as specified in her Trust? I've already completed the Death of Trustee Affidavit. Isn't some type of Trust Transfer Deed also needed?

Thanks for any help you might be able to provide!

Richard (California resident)