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Do I Need a Trust in My Estate Plan for Real Estate?

Serving Clients in the Gilbert, Arizona Area

Do I Need a Trust in My Estate Plan for Real Estate?
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Trusts are widely used in estate planning, so estates can avoid going through probate and maintain privacy. The terms of the trust ensure the wishes of the property owner are adhered to and their property gets distributed to the proper beneficiaries.

If a trust is part of your estate plan, assets must be transferred into it. This can be a simple process that requires nothing more than listing the assets as part of the trust.

However, transferring real estate property into a trust is more complicated. A new deed has to be issued and filed, insurers must be notified and, sometimes, permission must be obtained from the lender. Ask an experienced estate planning attorney about this process.

Yahoo’s recent article titled “Can I Transfer Property into a Trust?” says there are many different types of trusts, including living trusts, revocable and irrevocable trusts. However, each is only effective when assets are transferred into them. There are some restrictions on the types of assets that can be transferred into trusts. However, the types of assets that can be placed in a trust include:

  • Autos
  • Cash and bank accounts
  • Business interests
  • Investments, like stocks and bonds
  • Life insurance
  • Collectibles; and
  • Other personal property.

Placing personal property, like jewelry or collectibles, can be as simple as including the property on a list of assets drawn up when the trust is created. However, other asset transfers can be more complicated. Stock and bond transfers are generally handled through a brokerage or the financial institution holding them for the owner.

Real property, like a personal home, requires a different set of steps: a new deed must be created and recorded naming the trust as the owner of the property.

This can be accomplished with two types of deeds. A quitclaim deed is the easiest and most commonly used. The second is a warranty deed, which involves a guarantee the person transferring ownership has the right to do so and that no outstanding liens will interfere with the transfer.

To learn more about estate planning in the East Valley, Gilbert, Mesa and Queen Creek, schedule your free consultation with Attorney Jake Carlson by using one of the links above.

Reference: Yahoo (Feb. 7, 2023) “Can I Transfer Property into a Trust?”