How to Transfer Property to Your Living Trust

Your probate avoidance living trust is valid as soon as you sign it. But the trust won’t do you any good until you move your property into it. (In legal terms, this is called “funding” your trust.) When you put assets into your trust, what you’re actually doing is transferring what’s listed in your trust document into your name as trustee. You may do this by making new deeds, updating titles, or changing account ownership records.

This article explains exactly how to transfer real estate and other assets into your living trust, so you can make sure your trust avoids probate as intended.

You Must Transfer Property to Your Living Trust

If you don’t properly retitle your assets, your living trust won’t control what happens to your property after you die. Instead, your assets will most likely end up in probate or, if you don’t have a will, passing according to your state’s intestacy laws. Taking the time to transfer your property now means it will meet your probate-avoidance goals later. It also makes sure that your successor trustee can step in and manage your property if you become incapacitated.

Funding your living trust is essential, but it’s not difficult. It takes some time and paperwork, but you can usually do it yourself, without hiring a lawyer.

Putting Different Types of Property Into Your Trust

You might have listed several different kinds of property in your living trust. Each type has its own procedures for transfer. We’ll look at three different types of property in turn:

• real estate, such as your home, land, or other buildings
• other titled property, including vehicles or investment accounts, and
• untitled property, like household goods

If you’re still in the process of making your living trust and looking for more information about what types of property to include in it, see our article on what property you should list in your trust.

Steps to Transfer Real Estate Into Your Living Trust

To put your home or other real estate into your trust, you must make a new deed transferring ownership to yourself as trustee--here’s how:

1. Obtain a copy of your current deed.

The exact legal description of your property appears on your current deed. If you don’t have a copy of your deed, you can easily obtain one from your county recorder’s office (sometimes called the county clerk or land registry office). Most offices allow you to search property records by address or parcel number. Some counties also offer online access to property records, allowing you to download or request a certified copy from their website for a small fee.

2. Get the correct deed form.

You’ll typically use a “quitclaim” or “grant” deed for this transfer. If you’re not working with a lawyer, you can look for your state’s form online. Many counties publish blank forms or samples on their websites. Try searching “quitclaim deed form” or “grant deed form” plus your county name.

3. Complete the deed form.

Deed forms vary, but you’ll want to pay close attention to how you provide the following information:

• The current owners’ names. Use exactly the same forms as shown on your current deed.
• The new owner’s names as trustees of the living trust. For example, you would write: Tammy Tinkertown, Trustee of the Tammy Tinkertown Living Trust dated January 1, 20XX.
• The full legal description of the property. Copy this exactly from your current deed.

If you’re only transferring your share in a property, specify “all my interest in” or “a one-half interest in,” as appropriate, before the legal description. Check everything for accuracy, making sure all names, dates, and the legal description match your other records and the trust document.

4. Sign the deed in front of a notary public.

Once the deed is complete, all current owners transferring their interest must sign and date it in front of a notary public in the state where the property is located.

5. Record the deed.

After the deed has been signed and notarized, you must record it with your local property records office. This office may be known as the county recorder, county clerk, or land registry, depending on where you live. For a small fee, the county clerk will enter the deed into the public record.

6. Keep your records safe.

The recorder’s office will return your stamped original deed. It will include a reference number showing where a copy can be found in the public records. Store the deed in a secure place as proof of the transfer.

Tax and Insurance Issues for Real Estate and Living Trusts

Understanding the tax and insurance implications of transferring real estate into your living trust can help you avoid delays or fees.

Transfer Taxes

In most cases, you won’t need to pay state or local transfer taxes when you transfer your real estate into a living trust. These taxes are typically based on the sale price of a property, and since no money is changing hands, a transfer to a trust is usually exempt. To be sure, contact your county tax assessor, recorder’s office, or relevant state agency. Many counties now post real estate tax rules and exemptions online, making it easy to confirm whether any transfer tax will apply.

Insurance

After you’ve transferred your real estate into the trust, contact your homeowner’s insurance company to update the policy. The insurer will revise its ownership records, but this change shouldn’t alter your coverage or premiums.

Mortgage Issues When Transferring Real Estate Into a Living Trust

Most mortgage contracts include a “due-on-sale” clause that allows the lender to require immediate repayment of the entire loan if the property is transferred to another party. But federal law generally prevents lenders from invoking this clause when a homeowner transfers their property into a living trust. As long as you remain a beneficiary of the trust and the transfer doesn’t change who occupies the home, the lender cannot demand that the loan be paid off early (Garn-St. Germain Depository Institutions Act of 1982).

That said, before you transfer your property, it’s a good idea to:

• Carefully review your mortgage documents to see what they say about ownership transfers.
• Call your lender to confirm that adding your property to a trust won’t create any issues with your loan.
• Make a note of the date, time, and name of any lender representative you speak with, in case you need to reference the conversation later.

Once the property is in the trust, continue making your mortgage payments as usual and keep an eye on your statements to make sure nothing but the ownership name has changed. If a successor trustee ever takes over, they should promptly notify the lender about the change in management.

Transferring Titled Property Into Your Trust

For property with a title, such as your home, a vehicle, or securities, you must change the title from your name to the trust's name, listing yourself as trustee. Here are tips for handling different types of titled property.

Bank Accounts and Safe Deposit Boxes

It shouldn’t be complicated to change ownership of a bank account so that it’s held in your capacity as trustee of your living trust. Contact your bank to find out which documents you need; most financial institutions will request either a copy of the trust agreement or a completed trust certification form to confirm your authority. Some banks may also have their own forms for you to complete.

If you need to transfer ownership of a safe deposit box, you’ll also need to update its registration. The bank can give you a form to add the trust as the new owner. Be prepared to show identification. In some cases, you may need to present the trust agreement as well. Keep records of any changes.

Vehicles: Cars, Motorcycles, Boats

To place a vehicle into your living trust, you’ll need to complete a change of ownership form and have the vehicle title reissued in the name of the trustee. Your title certificate might include instructions for making this change. If you don’t know how to proceed, contact your state’s department of motor vehicles (DMV) or visit their website for information about required forms.

Special procedures and forms are required for transferring certain types of vehicles:

• Airplanes: The Federal Aviation Administration (FAA) handles aircraft registrations and provides specific forms for transferring ownership to a trust. Visit the FAA’s website for more information about the Civil Aviation Registry. You may be able to make this transfer online using the FAA Civil Aircraft Registry Electronic Services (CARES).
• Large boats: If your vessel is registered with the U.S. Coast Guard, you’ll need to use their forms to update the title.

Be prepared to provide supporting documentation, such as a copy of your trust agreement or a trust certification, and keep records of all completed transactions for your files.

Securities

The method for transferring stocks, bonds, and other securities into your living trust depends on whether you hold them in a brokerage account or as individual certificates.

Brokerage accounts. For securities held in a brokerage account, you’ll need to retitle the account in the name of the trustee or establish a new account under the trust. Ask your brokerage for instructions. Most firms offer a standard form to identify the trustees and outline their authority. They may also request a copy of your trust document or a certification of trust. In the absence of a dedicated form, you’ll typically need to provide a signed letter along with the necessary trust documentation.

After the transfer is complete, ask for written confirmation that the account ownership has been updated. If a new account number is assigned during the process, be sure to revise your trust’s property schedule with the new number.

Mutual funds. If you own mutual funds, contact the fund company to obtain its procedures. Most will provide a simple form and will ask for a copy of your trust or a trust certification.

Stock certificates. For stocks or bonds you hold in certificate form, you’ll need to have new certificates issued in your name as trustee. Your broker may be able to help, or you can contact the corporation’s transfer agent directly. (Details should be available from your broker or the company’s investor relations office.) The transfer agent will tell you exactly what you need, but you’ll typically need to send the stock certificates, a completed stock or bond power form (often found on the back of the certificate), and a copy of your trust or certification of trust. Include a letter requesting that the certificates be reissued to you as trustee, and keep copies of everything for your records.

Government securities. To retitle government securities such as Treasury bills or U.S. savings bonds, ask your broker to work with the issuing agency, or contact the agency directly for instructions.

After any transfer, keep all related documents and update your trust’s property list with new account numbers or details as needed.

Business Interests

You can transfer some business interests into your living trust. Here’s how.

Sole proprietorships. To transfer the business itself, just list the business’s name as an item of property in your trust document and include it in the trust’s Assignment of Property.

If you own the business’s assets as an individual, you can transfer each asset separately, as you would any other property that you own as an individual. (Transferring from yourself as an individual to yourself as trustee of your living trust, as discussed in this article.)

If you have a trademark for your business, you’ll need to reregister it in your name as trustee of your living trust. You can learn more about that (and use the forms) in Trademark: Legal Care for Your Business & Product Name, by Stephen Elias (Nolo).

Solely owned corporations. If you are the sole owner of stock in a corporation, you’ll need to transfer all of that stock from your name as an individual to yourself as trustee of your living trust.

Closely held corporations. Follow the corporation’s bylaws for transferring your interest. However, first check the corporation’s bylaws, shareholder agreements, and articles of incorporation to make sure that you have the right to make this transfer. (If you don’t, you may have to amend those documents first.)

S corps. You can’t transfer your shares in an S corporation unless it is “qualified” under the IRS’s rules. Get help from a tax professional.

Partnership interests. If your partnership agreement allows you to transfer your interest into your trust, you’ll need to notify your business partners and then change your agreement to show that your shares are owned by you “as trustee” of your trust. You may also need to change your partnership certificate. Get help from an attorney if your partnership agreement doesn’t make it clear what you need to do.

Limited liability companies. First, get consent from the other owners of the company to transfer your interest to your trust. Check the LLC’s operating agreement for any requirements. To transfer your interest, you’ll use a stand-alone form (sometimes called an Approval of Transfer of Membership, or something similar). Search for the form online or ask your business’s attorney to help you with the transfer.

Limited partnerships. Contact the partnership's general partner and ask what you need to do to transfer your interest into your living trust.

Copyrights

To hold a copyright in your living trust, list the copyright as an item of property in your trust document. Then contact the U.S. Copyright Office to transfer your copyright to yourself as trustee of your living trust. Learn more about transferring copyrights in The Copyright Handbook, by Stephen Fishman (Nolo).

Patents

To transfer your patent to your living trust, you’ll need to submit an “assignment” with the U.S. Patent and Trademark Office. You can learn more about this on the USPTO website and in Patent It Yourself, by David Pressman (Nolo).

Property Without a Title Document

Most work to transfer property into a living trust involves property that has a title document, as discussed above. However, you probably many types of property that don’t have a title document--for example, household items, sentimental objects, jewelry, books, records, computers, tools, and many other possessions.

Thankfully, transferring non-titled property is relatively easy. The most common way is to use an Assignment of Property that lists all of the items you want to distribute through your trust. On the assignment, you state that you’re transferring all of those items to your living trust. You sign the assignment and keep it with your signed and notarized living trust.

Conclusion

When you make a living trust, you must transfer property into it. However, how to do that depends on the type of property. You can probably handle most transfers yourself, but if you are unsure about the process, it will be worth your while to get help from an attorney.

For more information about living trusts, see the following articles:

• Types of Trusts
• Joint Revocable Living Trusts
• Alternatives to Making a Living Trust
• Trust vs. Will: Do You Need Both?

Learn more about WillMaker’s living trust (and its other estate planning documents in WillMaker’s Legal Manual.