Transferring Real Estate to Your Trust

In the past week I have blogged generally about the need to transfer your assets into your trust and specifically the need to transfer often forgotten assets like timeshares to your trust. The question is HOW?  How does one “transfer” an asset into their California trust?  Today we are going to focus on real estate transfers. In the coming days I will talk about other transfers to your trust.

Typically when you sign your trust with your attorney one of the documents they will you sign is a deed. Different attorneys use different types of deeds but in California it will typically be a “grant deed” or a “quitclaim deed.”  Though two lawyers could probably bore you with details of how they are different for our purposes it really does not matter which deed you use. The key is it’s a deed. For clarification this is NOT a “deed of trust.”  A deed of trust is related to the mortgage and typically mortgages are not involved with your trust.

So your attorney will prepare a deed. The deed will transfer title from the current ownership to the trust ownership. The attorney will obtain your current vesting deed to see how title is held exactly and then prepare a deed from that name to the name of the trustee as trustee of a trust. Let’s say that John Johnson signs a new trust called the Johnson Trust.  A deed would look something like this:

“John Johnson, A Single Man deeds all right, title and interest in that certain real property, legally described below, located at 1234 Main Street, Sacramento, CA to:

John Johnson, Trustee of the Johnson Trust, Under Trust Agreement Dated September 23, 2011.”

Below that, or on an attached page, would be the complete legal description. Accuracy is extremely important with deeds.  In particular look for:

– Current vesting is copied exactly. In this case current vesting is “John Johnson, a Single Man” and thus those exact words should be used on the new deed to the trust. Look out for middle names, middle initials, etc… and copy exactly.

– The name of the trust should be identical to the actual trust name.  Years from now when John’s kids are trying to sell this property a title company will ask for documentation to prove the trust exists.  The trust name on the deed should match the trust name on the trust document exactly including the date.

– Also the legal description should be copied exactly. Check capital letters, punctuation, strange symbols, etc… and get them all exactly right.

Also, when transferring real estate to your California trust there are often cover sheets. In California the counties all require the use of a Preliminary Change of Ownership Statement. This accompanies the recording of a deed and is sent to the county assessor to make sure there is no change in property tax (there typically would not be in a transfer to a revocable trust). Your attorney will prepare that and have you sign it when you sign your deed.

Related to this it is good practice to advise your homeowner’s insurance of your trust. It should not affect your rates but good for them to be aware that your house is now titled in your trust.

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