After you make a living trust, you have to transfer your house into it. So how do you do that correctly?
A lot of people who make their own living trust miss at least one of these steps, and that can cause legal problems that cost you and your family a lot of money. Follow these six steps and you’ll transfer your house into your trust the right way.
Once you know what to do, this is a simple process. It’s not rocket science.
Step 1: Find a Real Estate Deed Template
Start by finding a deed template. Depending on where you live, your county may have one you can follow. You can get it from the county directly, find templates online, or pay for one that’s specific to your county. Choose whatever fits your county and your comfort level.
Step 2: Fill Out the Deed Correctly
This is where a lot of people go wrong. They have a template but fill it out incorrectly, and that creates two problems: the county may reject the deed, or the deed may be written in a way that fails to protect your house from probate.
A few details to get right:
- Your trust name must be exactly correct, word for word.
- The assessor’s parcel number must be correct.
- The legal description must be correct.
- Your own name must match how you legally hold title. If your legal name is Jonathan, don’t write Joe or John or whatever you go by.
Those small details matter. Get them wrong and the county will reject the deed.
Step 3: Sign and Notarize the Deed Correctly
Make sure the deed is signed and notarized correctly. Counties often reject deeds when the notarization is wrong, usually because it’s missing the specific legal language your state requires. Make sure your template matches your state’s notarization requirements.
Step 4: Fill Out the County Tax Forms
Some counties require additional forms when you record your deed. In California, for example, you have to prepare a Preliminary Change of Ownership Report. Other states, like Washington, have their own requirements too.
Getting these forms right is critical. If you fill them out incorrectly, your property taxes could be reassessed. This is another step people get wrong, and the result is painful. Someone paying $2,000 in property taxes can suddenly be paying $4,000 or $8,000 after a reassessment. If you don’t want your taxes to go up, complete the county forms correctly and submit them with your deed.
Step 5: Record the Deed and the County Forms
Signing and notarizing the deed is not enough. You have to record it while you’re alive to avoid probate issues.
Don’t just tuck the signed deed into your estate planning binder. Take it to the county where the property is located and record it there. Once it’s recorded, you’ll get a recorded copy back. Keep that copy in your binder as proof the deed was properly recorded.
Step 6: Update Your Homeowners Insurance
Most homeowners skip this step, and so do many people who hired a lawyer.
Once the deed is recorded, your house is technically owned by your revocable living trust, not by you as an individual. That means your trust needs to be listed as an additional insured on your homeowners policy. You as an individual stay insured, and the trust is added as an additional insured.
Contact your insurance agent, let them know you’ve transferred the house into your trust, and ask them to add the trust. Most companies won’t raise your premium, but a few will by $15 or $20 a month. That’s not much, but it adds up over time. If your insurer insists on charging extra, tell them you’ll shop elsewhere. You’ll usually find another company that charges less, so you have options here.
Get a Lawyer to Review Your Deed First
These are the same six steps my clients and I follow every single time we move a house into a trust. Most people get step 2 wrong, step 4 wrong, and definitely step 6, because they simply don’t do it.
Your house is most likely your biggest asset, so don’t do this blindly or rely on how someone else says they did it. I always recommend having a lawyer look at your deed before you record it, both so it’s done correctly and so your property taxes don’t get reassessed. Many lawyers offer free consultations, so find one who will review your deed for free.
Ready to Transfer Your House the Right Way?
Take the free trust class. I show you how to make your own living trust the right way, including how to transfer your house into it, so you can protect your home from probate with confidence and make sure your loved ones inherit it when the time comes. I cover everything here in much more detail. Register at freetrustclass.com. Even if you plan to hire a lawyer, watch it first so you understand the process.
Book a free phone consultation. If you would rather have it handled for you, talk with our team about a plan built around your family. Call us at (408) 412-1913 or visit treeoflife.legal.
Subscribe on YouTube. I post new videos every week on living trusts and how to do it yourself.
My goal is to help you keep more money in the family and give you the peace of mind you deserve.
Disclaimer: I am not your lawyer, and this article is not legal advice. It is information only. Reading it does not create an attorney-client relationship. If you have a legal question, please talk to a lawyer.
