Ownership of real property is generally evidenced by a deed, which is recorded on the land records in the city/town/county in which the property is located. When you, as a grantor, wish to transfer real property to a trust, a deed is prepared that names the trustee as the grantee of the property. This is not a difficult process, but you should keep the following in mind:
What type of deed … warranty vs quit claim?
Chances are you received a warranty deed when you bought the property. Under a warranty deed, the seller warrants that he/she has good title to the property being sold, and that he/she will defend your title and possession of the property, if challenged. If you then transfer the property to the trustee of your trust by warranty deed, the integrity of the chain of title will remain intact and questions concerning title should not become an issue when the trustee ultimately sells the property.
However, many trustmakers prefer to convey their real property to their trust by quitclaim deed. With this type of deed, you give no warranties or assurances whatsoever as to the type of interest you have in the property. Instead, a quitclaim deed merely passes to the trustee whatever interest you have in the property. When using a quitclaim deed, you need to consider what a potential buyer will think when he/she considers buying the property from the trustee.
If you have title insurance on the real property you want to transfer to the trust, talk to your title insurance company before making the transfer. Sometimes the policy may be terminated by the insurance company if you transfer the property because the trustee may not be considered a successor in interest under the terms of the policy. If this is the case, then the trustee would have to purchase another title insurance policy, or go without. If there is no mortgage on the property, then you can decide whether title insurance is necessary. If you do have a mortgage on the property, then the bank or mortgage company may require you purchase another policy and pay another premium.Tangible personal property
Tangible personal property
Tangible personal property is property, other than real property, that physically exists. It is property that you can actually touch and feel, such as jewelry, household furniture and furnishings, garden and lawn furnishings and equipment, books, silver, china, glass, rugs, art, hobby and sports equipment, collections, clothing, automobiles, airplanes, boats, and the like. It does not include real property, or intangible property such as money, bank accounts, stocks or bonds.
Transferring a vehicle to a trust is similar to transferring it to a third party. As owner, you would sign the title over to the trustee. The trustee would then register the vehicle in his or her capacity as trustee. When registering a vehicle held in trust, the same requirements apply as with vehicles registered in your own name. You will have to present an insurance card showing that the insurance on the vehicle is listed in the name of the trustee. The name (of the trustee) listed on the registration must match the name listed on the title. You will also have to produce either a copy of the trust instrument or a letter from your attorney verifying the name of the trust and the name of the trustee. This letter must include verification that the trust is in full force and effect.
Regarding most tangible personal property, there is no formal title or registration (consider jewelry, household furniture and furnishings, etc.). As a rule, these items do not present a major problem from an estate planning standpoint, unless they have not been transferred to the trust prior to your death (or distributed through a pour-over will). When there is no formal title, transfer of tangible personal property is generally accomplished by a bill of sale, deed or gift. A deed of gift can describe categories of the property, or can be given for each specific item. You may sign as many deeds of gift as you feel necessary to accomplish the objective of transferring all of your tangible personal property to the trust.
What happens to the property you acquire tomorrow, when you gave the trustee a deed of gift yesterday? Some people handle this issue by stating in the deed of gift that after-acquired tangible personal property belongs to the trustee. Others prefer to give a new deed of trust each year. How you deal with after-acquired property is totally your choice.