Understanding & Signing The
Deeds For Transferring Real Estate To Your Living Trust
Must Convey By Deed All Real Estate Property To Your Living Trust
Whether you now own 100% of a piece of real estate or own a part interest as co-owner, it is vitally important that you execute and record a deed for each whole or part interest – conveying and transferring it to your trust (if you want your trust to pass the property). Generally, real property is any ownership interest in or right to land, whether or not there is a house or building on it. Oil and mineral rights are also a real property interest. Mobile homes are not a real property interest (but any land it sits on is if you own that). Contrary to an often popular belief, you are the full legal owner of your real estate property, regardless of any outstanding loans used to purchase the property (or funds obtained through equity loans). The lender does not enjoy any ownership interest, but rather holds a “lien” against the property.
We Utilize Quitclaim Deed Which Serve To Pass Through Whatever Interest You Own
While there are different types of deeds that can be used, for most states such as California we utilize Quitclaim deeds and for a few states we utilize a warranty or grant deed. A Quitclaim Deed is simply a pass through Deed that says: “whatever interest I currently own in this property, I pass through to my trust and nothing more”. As a rule, we believe Quitclaim Deeds are more appropriate for gifting and transfers to a trust.
Please Sign, Date, and Notarize All Deeds
Please sign and date and notarize all of your Deeds.
The Recorders Office Will Reject Any Deed Not Properly Notarized and Clearly Stamped
When it comes to deeds, it is doubly important to make sure that the notary puts a clear and legible stamp on the deed – and fills in and signs all parts of the notarial area — otherwise the recorders office may reject it.
A Reminder About Potential Future Real Estate Issues
- New Real Estate: It is very common for people to forget to title their new real estate in their trust. Don’t forget about this! If you want your trust to pass the property then be sure to execute a deed transferring and titling any new (whole or part) interest in real estate into the name of your trust (unless you acquire title directly in the name of your trust).
- Warning about Re-Financing Transactions:If you re-finance property which is, or should be part of your trust, we advise doing a new deed immediately after the closing. That is because more often than not, (to make it easier), they demand and have you remove the property from the trust and/or obtain the financing in your individual name.