Oftentimes, you will hear the phrase funding your living trust. Funding the trust merely means that you need to re-title particular assets into the trust. It is crucial to ensure that the proper assets are re-titled. For example, the main asset for many individuals is their real property which refers to any type of land, residences or commercial properties that you own. For real property located in California, re-titling is necessary, if the real property is worth over $50,000.
For example, in California, you would prepare a new deed, typically called a Trust Transfer Deed which changes title from your individual name to your individual name, as trustee of your living trust. It is required that the legal description of your property is attached to the Trust Transfer Deed. The attorney will ask you for a copy of your Grant Deed for each of your properties because the Grant Deed will contain the legal description. After the new deed is prepared and executed, it will be recorded in the county where the real property is located. Each time that you record a deed, there is a recorder’s fee. The amount of this fee depends on the recorder’s fee schedule in that particular county.
Also, when you record a deed, you will need to provide a Preliminary Change of Ownership form. This document informs that County Assessor that you are merely re-titling the property into the name of the living trust. This is not considered a change of ownership because it is an exempt action. Recording the new deed will not cause your property to be reassessed. Some county recorders’ offices may also require the submission of additional documents.
If you own real property located in another state, you will also want to re-title those properties into the name of your living trust. Each county has their particular requirements and recorder’s fees. Finally, if you own property located outside the United States, you will want to check with foreign counsel regarding the proper way to plan for these assets.
With planning and re-titling of your assets into your living trust, you can ensure that your real properties are transferred to your beneficiaries seamlessly using your living trust.