Putting Property Into a Trust - YouTube

Hi Lee Phillips here.

I want to talk to you for a minute about putting property into a trust

living revocable trusts

everybody I think should actually probably have one

if you've got property.

However, they fail in most families because

the lawyer doesn't teach them how to fund the trust.

The trust has to own stuff

the stocks, the bonds, the bank accounts, the brokerage accounts, the real property

How do you get the real property into the trust?

well you're gonna have to deed it

that's the only way that you transfer a property

real property

is through a deed.

So we're gonna make out a deed

from you

I assume it's in your name now

if it's in your LLC or something

you're not gonna put it into the trust

just the stuff that's in your name.

So you're gonna make out a deed

going from you

as the grantor

to the trust

and the trust is then going to be the owner.

A couple of three or four things we've got to talk about.

First of all

what kind of a deed do you use?

You can use a quitclaim deed in this situation

if you're moving property to an LLC

from you to an LLC or something

then you should be using a warranty deed

because you want the warranties

that are associated with prior deed and the property

to go along with the transfer.

In this case though

basically all we're doing is we're taking

the piece of property from one of your pockets

and putting it into the other pocket

you

technically still own it.

Well, technically you don't own it

legally you don't, the trust does

but for all practical reasons, you own it.

The courts say you still own it

the IRS says you still own it

everybody says you still own it

kind of.

So

a quitclaim deed

moving it from one of your pockets to the other pocket will work.

The warranties are still with you

because we didn't change you.

So most attorneys use a quitclaim deed

when they transfer property from you

to the living revocable trust.

By the way a quitclaim deed means you quit claiming

any interest that you have in the property

and you give that interest

whatever it is

to the person that the deed goes to

the grantee.

So we're going to use a quitclaim deed probably

it goes from you to the trust

on the trust

you have to have three parts to the name of the trust

and I've told you this lots of times

you have to have the name of the trust

and that could be your name

the John Doe Living Revocable Trust

which would be abbreviated John Doe Trust

but in this case use the whole name

the John Doe Living Revocable Ttrust

Under Agreement or Dated such-and-such a date

and then

the name of the trustee

John Doe, Trustee

So you're gonna be the guy who gives it up

and you're gonna be the guy who takes it

as the trustee.

Technically the title is held in the name of the trustee

and I get one or twocases a year where the attorney

or the title company or whoever

forgot the date on the trust

or they forgot that trustee's name.

So you've got to have all three of those elements

name, date, trustee

and

you've got to have the property description

and

you've got to have your name as the Grantor.

Your name has to be exact

on that quick claim deed

exactly the way it is

on the deed as it is now

as you own it now

If it's John L. Doe

then it needs to be "John L. Doe" on the quictclaim deed.

if it's John Doe on

the original deed and you put John L. Doe

that ain't going to work, that isn't exactly the same.

The names have got to be the same.

The property description's got to be the same

in the name of the trust

once you've got those you're pretty much just in a standard deed situation

with a quitclaim deed.

Now is there a tax consequence?

The answer is no.

However

some states have passed laws

for example California has Proposition 13

that says we can't increase the property taxes on your property until

it changes hands

then we get to increase the property taxes.

They did this back in the 70s or whenever

because the property values were going up so fast

in California and they were increasing the property tax every year

and the people were going I can't do this

so they said okay time out we will only change the property tax

when you transfer the property.

Well this is a transfer of property.

Okay

Prop 13 says

well it's from you to you

the law says it's from you to you

so in California for example

you simply have to tell the state

file a paper with them

that says

we've just transferred it from me to living revocable trust

and then they won't increase the property tax.

If you're in Florida or Texas

you've got to worry about the homestead

you should have a paragraph in your trust that talks about the homesteads

and you may have to go down

and file a paper

with the state saying now now, time out

this is still my personal residence

I get to homestead it

even though it's in the name of the living revocable trust.

Call up your County Recorder

your parish recorder if you're in Texas

and they should be able to tell you

what the scoop is on that.

So those are things you have to worry about.

You shouldn't have to worry about your insurance

it'll still be in your name that's fine

it's you

it's not like you transferred it to

an LLC or something where they get to change the name of the game

you may want to have the insurance company recognize that it's in a trust

but that's usually not necessary

you shouldn't have to have an increase in the property taxes

in fact the law says they can't increase the property tax on me

now you may have to notice them like you do in California

and I think California is the only one you have to do that with I'm not sure but check

so what else do you need to do in order to transfer real property

into your living revocable trust?

that's about it

it's not hard

I would record the deed

if the deed ever gets lost

then the recording of the deed works

I don't even need the deed

once it's recorded.

So record the deed

that's probably a good idea so you don't you don't worry about losing the deed

you could keep the deed and not record it

and then the family could record it after

but you might as well record it, then we know it's there and everything's cool

so if you don't record it

what do you do with it?

Well what are you with it anyway?

You put it in your file cabinet or wherever

put it in your safe-deposit box

I don't care what you do with your deed

wherever your deeds are normally kept

keep this deed with those deeds.

You should be able to transfer your piece of property

with really out not much problem

as long as it's from you to the living revocable trust

use a quitclaim deed

make sure the name of the trust is there

make sure your name is there exact as it was before

if it's you and your wife, husband you got to have the--everybody's gotta sign

and of course the deed has it's seven or eight elements that you have to follow but

we're not going into that right now.

So this is Lee Phillips talking about how you move

a piece of real property