Transferring Real Estate to Your Trust

Transferring real estate, such as a home or property, to a Trust involves several legal steps and requirements that can vary by location. This guide outlines the general process for transferring property to a Trust:

1. Review Your Trust Document: Ensure that your Trust is properly established and that it includes the property you wish to transfer.
2. Obtain the Property Deed: Gather the current deed for the property, as you will need it for the transfer process.
3. Prepare a New Deed: Draft a new deed that transfers ownership of the property from you to the Trust. This is often a quitclaim deed or a warranty deed.
4. Include Necessary Information: The new deed should include the name of the Trust, the trustee(s), and a legal description of the property.
5. Sign the Deed: Sign the new deed in accordance with state laws. Some states may require notarization.
6. File the Deed: Record the new deed with the local county recorder’s office or land registry to make the transfer official.
7. Update Insurance and Property Records: Notify your homeowner's insurance provider of the change and ensure that property records reflect the Trust as the new owner.
8. Consult a Professional: It’s advisable to consult with a legal professional or estate planner to ensure compliance with local laws and regulations.

Transferring a Property with a Mortgage

When your property is under a mortgage, it's important to understand how transferring it to a Trust might affect your loan:

1. Due-on-Sale Clauses: Many mortgages include clauses that require full repayment if the property is transferred. However, federal and state laws typically exempt transfers into Trusts from triggering these clauses, provided the property is residential (with five or fewer units) and the Trust grants you occupancy rights.
2. Contact Your Lender: Before proceeding with the transfer, reach out to your lender to discuss the situation and request written confirmation that the transfer won't violate your loan terms. This precaution can help avoid potential legal issues.
3. Refinancing Considerations: If you're planning to refinance, it may be simpler to wait until after the refinancing process to transfer your property into the Trust. Lenders often require that the property be temporarily removed from the Trust for refinancing.

A Note on Insurance Policies

Transferring a property to a Trust generally doesn’t impact most real estate insurance policies, such as fire, casualty, and liability insurance. However, it’s advisable to confirm with your insurance providers that your policies will remain in effect after the transfer and to check if any endorsements are needed.