When you begin looking into Estate Planning, it can often seem confusing and complicated, causing you to want to put off the planning. However, Estate Planning, specifically Trust-Based Estate Planning, can make your eventual passing easier for your loved ones as it takes added stressors off their shoulders and leaves more room for the grieving process.
You may now be wondering exactly what a Trust is, why it is important, and what you should transfer to your Trust. A Trust is a legal document where you assign some aspect of your assets to another person. This is important because a Living Trust ensures your assets will be taken care of when you die and that they will end up in the hands of the right people. There are many different types of assets that can be included within a Trust, including clothes, property, bank accounts, and much more. However, for this article, we will be primarily focusing on how to transfer your real estate to your Trust.
Transferring your real estate to your Trust can become a frustrating process if the proper steps are not taken, which is why Trust & Will has put together a list of the necessary steps you will need to take when transferring your real estate to a Trust:
It is important to note that while this list covers the basic essentials of what will need to be done to transfer your real estate to a Trust, your state may have specific requirements that you will need to learn about. Since each state and county can have different requirements, it would not be possible for Trust & Will to cover every single one, which is why this article will instead give a basic overview of the process.
Steps for Transferring Real Estate to Your Trust
We often have the desire to push off Trust-Based Estate Planning, especially once we look more into the details of all the different necessary steps you will need to take to transfer assets to a Trust. However, Trust-Based Estate Planning is important to take care of now to relieve potential stress from our loved ones that we may unexpectedly leave behind.
Discuss your decision with your Trustee
The very first step that you should take when transferring any funds to your Trust is discussing it with the person you want to make the Trustee of your Trust. It will be important to inform them why you want to make them the Trustee and what exactly this will entail. When dealing specifically with real estate, there are some unique considerations you and your Trustee will want to think about.
First, if you currently have a mortgage on your house, you will want to discuss the responsibility of the mortgage with your Trustee, as they would become the eventual owner of your real estate and thus take over your mortgage. Your Trustee may not feel comfortable taking over your mortgage, or they may not have the means to do so. This may result in you wanting to consider choosing someone else as your Trustee.
Another thing you will want to discuss with your Trustee is whether or not there will be taxes to transfer the deed in your specific state. Most states do not apply transfer taxes for Trusts, but you will want to double-check on your specific state and county. One more item you will want to discuss is the insurance on the home and determine if your home will still be covered by your insurance when you transfer it to your Trust.
These are just a few examples of topics you will want to cover with your Trustee. Other topics may come up in your discussion and there may be additional concerns that your Trustee may have that you will need to address. It is important to go over all your Trustee’s concerns before moving forward on any Trust transfers.
Create a new deed
Once you have discussed your decision with your Trustee, you will want to create a new deed. A new deed is necessary because you will want to list your Trustee on the deed, as they will become the eventual new owner of your real estate. You will want to list your name as the current owner and then include your Trustee as the future owner in this new deed. It will also be important to check in with your County Recorder for exactly how they will want your deed formatted.
Check with your county and state
After you have completed your new deed, it will be important to call your state and local county to see what documents, beyond a new deed, that they will require to transfer your real estate to a Trust. Each state and county can have different rules, so this is a crucial step in the process to ensure you have the necessary paperwork. For example, the county may want documents stating who the Beneficiaries of the Trust are, which while you are living you are the Beneficiary of your Trust. This is just one example of the documentation you may need.
File the new deed
Once you have written out your new deed and completed the necessary paperwork, you will need to file it with your County Recorder. This is an important step because it ensures that your new deed will be legalized and replace your old deed. The County Recorder will also most likely require that it be the original document and not the copy for their records.
Transferring assets to your Trust-Based Estate Plan can be frustrating. However, it is a necessary step that you will want to make so that the transferring of your assets is made easier once you pass. By taking this necessary precaution, you will be giving your loved ones the needed space to grieve after your death instead of having to deal with unnecessary paperwork. Trust & Will is committed to making your Trust-Based Estate Planning and Will planning easier with our online services. Visit our website today to start planning now before it’s too late.
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