If you own real property, you may want to consider transferring it into a revocable trust to make sure your desired loved ones receive it upon your death. At A People’s Choice, we have helped thousands of families create valid revocable trusts. Contact us today for more information about our legal document preparation service and how we can help you. Read on to learn the importance of transferring real property into a trust.
Transferring Real Property Into A Trust Helps Avoid Probate
In order to create a valid legal trust, you must fund it with an asset. Once the trust is funded with an asset, that asset will be subject to the terms of the trust agreement. If your real property is not titled in the name of your trust, it will go through the probate process upon your passage. If your real property is referenced in your last will and testament, then it will be distributed according to your wishes. If you do not have a last will and testament, your real property will be distributed to your heirs according to California intestate succession laws.
If you own real property out-of-state that was not transferred into a trust, your loved ones will be required to go through the probate process in that state. It is in your best interest to transfer all of your real property into a trust. Not doing so can subject your loved ones to lengthy probate proceedings.
Transferring Real Property To A Living Trust Helps Avoid Paying Estate Taxes
If you do not transfer your real property into a trust, it can be subject to estate taxes. While estate taxes will not impact you directly, it will impact your heirs associated with the intestate succession of your real property.
Transferring Real Property Into A Trust Helps Avoid Guardianship/Conservatorship
If you become mentally incapacitated, a court supervised guardianship or conservatorship may be established on your behalf. If you have a revocable trust funded with your real property, it will be managed by the trustee instead of a court-appointed guardian or conservator. Your real property will be administered according to your desires.
Transferring Real Property Into A Trust Allows You To Designate Beneficiaries
Some parents hold their real property as joint tenants with the right of survivorship with their children. For example, one parent will form a joint tenancy with one child, usually the responsible one, in hopes of him/her selling the home and distributing the proceeds among their siblings. Unfortunately, by holding joint tenancy with one child, the other remaining children are legally disinherited. It is best that your real property title is transferred into the trust in which you can choose your beneficiaries.
How to Transfer Real Estate Into a Trust
You can transfer real estate into a trust by executing and recording a Trust Transfer Deed. A Trust Transfer Deed is a deed specially designed to transfer real property into and out of a living trust. At the time the Trust Transfer Deed is submitted for recording, you will also need to send a Preliminary Change of Ownership form. The Trust Transfer Deed is recorded in the county in which the real property is located and will contain the legal description of the real property, the assessor’s parcel number and the exact name of the trust. A fee will be due when the Trust Transfer Deed is submitted for recording.
Putting Property in Trust
In conclusion, putting property in trust after the trust is executed is a critical part of the estate planning process. Make sure you transfer your real property into a trust prior to your passage. In addition to real property, assets such as stocks, bonds, and savings accounts should also be put into a trust. Liabilities and general insurance policies can stay outside the trust. Remember, any assets that you leave outside of your trust will be subject to the probate process. Contact us through our online system or call 1-800-747-2780 to find out more information about how we can help you transfer real property into a trust.