Common Problems With Transferring Real Property To A Revocable Living Trust
There are a few common problems that pop up from time to time with transfers of real property to a revocable living trust. If you encounter one of these problems contact your attorney for help with solving these problems.
If you refinance your real property and your lender requires you to take the real property out of your revocable trust, make sure that you prepare a new deed to put the real property back into your revocable trust once you finish the refinance. If you are going to undertake a refinance this way, you may want to consider having two deeds prepared. The first deed is used to take the property out of your revocable trust for the refinance, and the second deed transfers your real property back into your revocable trust once the refinance transaction is complete. In this process, you would sign both deeds at the same time, record only the first deed, and move forward with refinance. Upon completing the refinance record the second deed, moving the property back into your revocable trust. This process has a number of benefits is that if anything should happen to you during the refinance process, the second deed is already pre-signed and it can be recorded at that time and protect against the property going through the death probate process. While banks are becoming more comfortable with refinancing a property held in a living trust making sure you have good legal counsel for the refinance can go a long way to preventing problems down the road.
In 2006, the American Land Title Association (ALTA) changed the standard owner’s policy such that insureds were specifically authorized to transfer properties to a revocable living trust or limited liability company. ALTA accomplished this by expanding the definitions of “Insured” to include successor revocable living trusts and LLCs.
There is some conflicting opinion as to whether title policies issued prior to 2006 allow for the same. Prior to transferring your real property to a revocable living trust or limited liability company, it is important to read the terms of your title policy and contact the issuer if there is any question as to whether coverage will
- Your Time Share.
Your timeshare should be the name of the trust. Often the first step is to contact the timeshare company and ask them what they require to move your interest into your trust.
- Property In Other States
Your out of state property should be in the trust. If the out-of-state property is not currently in the trust, you may want to contact an Attorney in the state where the property is located to arrange for a deed to be prepared to move the property into the trust.
- Small Properties.
Even a small undeveloped lot should still be titled in your trust. Otherwise, upon your death, the property may need to go through the death probate process.