When you create a trust to protect your real estate holdings, it is important to carefully consider all the steps necessary to properly fund it. If you do not fully fund the trust, you not only waste the resources you invested to create it in the first place, you also may miss out on the important legal protections trusts provide.
First, you must create a new deed that removes the property from your personal ownership and places it in the ownership of your trustee. Before you record this new deed, it is important to get the permission of several parties who may take issue with the transfer.
You should check with your mortgage lender if the property you plan to transfer is still under a mortgage and is not your first or second home. In some cases, lenders are not particularly fond of approving a new deed on an additional property, so it is important to iron out any conflicts before making the transfer. You may also need to check with your homeowner’s association, if the property is subject to one. This is especially true for those wishing to transfer condominiums, which are often subject to extra regulation and stricter homeowner association rules.
Once you clear these hurdles, you may record the new deed and file all the proper documentation with clerk of court in the county where the property lies. It is also useful to provide the county with proof of the trust, to avoid unnecessary problems.
If you have further estate planning needs, or simply wish to review your current estate plan, you can consult with an experienced attorney. Professional counsel will guide you through the process of creating and funding a real estate trust, and may identify other ways you can protect your rights and achieve your estate planning goals.
Source: The Balance, “How to Fund Real Estate Into a Trust,” Julie Garber, accessed Feb. 09, 2018