How to transfer property into your living trust
Creating a trust does not move anything into it. Until you record a deed transferring the property to the trustee, your house is still in your own name and will still go through probate, which is exactly what you paid the trust to avoid.
An unfunded trust is an expensive filing cabinet
This is the most common estate planning failure there is. People pay $2,000 for a trust, put the binder on a shelf, and never deed the house into it. At death, the property goes through probate exactly as if the trust never existed.
The five steps
- Get the trust's exact name and dateFrom the signature page of the trust document itself. It will read something like *The Margaret E. Whitfield Revocable Living Trust dated March 14, 2019*. Copy it character for character.
- Get the current deedYou need the legal description exactly as recorded, and confirmation of how title is currently held.
- Prepare a deed to the trusteeGrantor is you as an individual. Grantee is you as trustee of the named trust. A quitclaim is normal; a warranty deed is sometimes preferred if a title insurer asks.
- Notarize and recordTransfers into a revocable trust for your own benefit are exempt from transfer tax in nearly every state, and federal law protects you from due-on-sale acceleration.
- Update insurance and check the exemptionsTell your homeowner's insurer the trust is now the owner. An unlisted owner is an uncovered owner. Confirm your homestead exemption survives; most states preserve it for a revocable trust, but some require a filing.
The detail that makes transfers fail
The trust name has to match exactly
"The Whitfield Family Trust" and "The Whitfield Family Revocable Living Trust dated March 14, 2019" are, to a title examiner, two different entities. A mismatch means the property may not be in the trust at all, and nobody finds out until the successor trustee tries to sell it.
What does not change
- Your mortgage. Federal law prevents a lender calling the loan due for a transfer into a revocable trust where you remain a beneficiary and occupy the property.
- Your taxes. A revocable trust is a grantor trust. It uses your Social Security number and everything is still reported on your return.
- Your control. As trustee you can sell, refinance, or take the property back out at any time.
- Your property tax basis, in most states. Transfers into a revocable trust for your own benefit are generally excluded from reassessment, though you may need to file a claim.
Refinancing later
Some lenders ask you to deed the property out of the trust for the closing and back in afterwards. It is administrative rather than a problem, but it is two more deeds, and people forget the second one. If that happens to you, put a reminder in your calendar and check the record a month later.
$39. We prompt for the exact trust name and date and explain why it has to match.
Common questions
No, for a revocable living trust where you remain a beneficiary and continue to occupy the home. The Garn-St Germain Act bars enforcement of the due-on-sale clause in that situation. Notifying the servicer afterwards is sensible housekeeping.
A quitclaim deed is the normal choice, since you're transferring to yourself as trustee and there is nothing to warrant. Some title companies prefer a warranty or special warranty deed to keep the covenants running; either works.
A revocable trust gives no creditor protection at all. You can revoke it, so the law treats the assets as still yours. Irrevocable trusts can protect assets, but you give up control permanently and that is a decision for an attorney.
Yes, and it is routine. The mortgage stays exactly as it is and the lien follows the property. You keep making the same payments to the same servicer.
Keep reading
Deedly is not a law firm
We provide self-help software and state-specific statutory forms; you make your own decisions about your property. Using Deedly does not create an attorney-client relationship, and nothing here is legal advice. If your situation is complex or contested, talk to a licensed attorney in your state.