Taking Title When You Have a Living Trust

You spent time and money creating a living trust to avoid probate and protect your family. But your trust only controls the assets that are actually in it.

Real estate is the asset most commonly left out of otherwise well-drafted trusts. People create the trust documents, put them in a binder on a shelf, and never get around to executing the deed that actually transfers their home into the trust. Or they buy new property after creating the trust and take title in their individual names out of habit.

The result is that the property goes through probate anyway — exactly what the trust was designed to prevent.

When you purchase a home, investment property, or vacant land, you have an opportunity to take title directly in your trust's name at closing. This is the most efficient approach: no second deed, no additional recording fees, no chance of forgetting to transfer it later.

Taking title in a trust requires attention to detail. The deed must be properly drafted with your complete trust name and date. If you're financing the purchase, your lender needs to know you're taking title as trustee. A certification of trust may be required to verify your authority without revealing your full trust document.

Most lenders will allow you to take title in your revocable living trust, as long as you (the borrower) are the trustee. Federal law generally prohibits lenders from calling your loan due when you transfer property to your own living trust, so there is no risk of losing your financing.

At Ashton Title, we work with your lender to ensure the closing documents properly reflect your trust ownership while meeting all mortgage requirements.

Already own property that should be in your trust? We can prepare and record the deed to transfer your existing real estate into your trust. This is a process we handle regularly for the estate planning clients of our affiliated firm, Anderson Law Firm.