Simpler way to handle living trust/will for property than transferring into a Trust

[stephenInCA]

I just completed the Nolo Quicken Willmaker . It prints the following notification(/warning):

You're done making your trust document. Congratulations!
Your living trust is not yet effective, however.
To make your living trust effective, you MUST transfer ownership of the property you listed so that it is legally held in your trust. Until you do this, your trust document has no effect on your property. Transfer the property as soon as possible after you print and sign your trust document. Learn more about Transferring Property Into Your Trust on Nolo.com.

I really do not want to transfer ownership of the properties into a Trust. That is a major major paperwork headache for the properties. There must be a simpler way that allows me to retain ownership of the property while making official the intentions that the Living Trust contains.

What are my options here?

 

[Dandy Don]

Why did you create the trust?
What type of trust is it?
What assets are in the trust?

Instructions about your funding a trust would be too lengthy for this forum. If you don't want to retain the services of an attorney to do it, do some research on your own and have an attorney review it after you have finished.

****************************************************************************************************************************

 

[stephenInCA]

Thx Don for responding. The point is that the property is in my name. I do not want the headache of needing to re-do Title to name some kind of a Trust as the new owner. This is an additional burden for every real estate transaction and makes what should have been straightforward - the Living Trust - much more complicated. Also consider: only a small fraction of properties are listed as owned by Trust's: there must be other mechanisms available to allow Living Wills to function rather than setting up a holding entity.

 

[stephenInCA]

The question was not about how to fund a trust: I had already read the instructions provided by the Nolo software. Rather it is an unexpected burden/hassle to need to change Title for the properties. I am asking again: Is there no alternative to setting up a Trust as the owner of the property?

There is even more to it: when writing an offer on a home it is not my preference to write "Trust for FirstName LastName" as opposed to just my name. The reasons for that preference are my own: but it is seeming that I do not have any real choice in the matter! Or at least not unless I want to and amend the Title after closing .. which is even less palatable.

 

[Zigner]

You need to the transfer the property in to the trust. If you don't, then YOU still own the property and it will need to be probated (with all the costs and headaches involved in that). The simplicity of creating, filing, and paying for the recording of the deeds far outweighs the difficulty and cost of probate.

 

[stephenInCA]

No debate that probate is worse: but it seems the requirements of the Living Trust is anyways more complicated than needs be. Why is it that property in my name and that has been designated as passing to a Trust Beneficiary must first have Title transferred ? Why is the Living Trust words saying "PropertyA owned by FirstName LastName will become the property of PersonBFirst PersonBLast" not sufficient? The intent is clear. Requiring change of Title first to Trust of FirstName LastName and then again to PersonBFirst PersonBLast is an extra step and unnecessary complication. It is also as mentioned above not ideal when making real estate offers.

 

[doucar]

Because under the laws of every state, the wording of the deed controls, not the wording of the living trust or even a will.

 

[Taxing Matters]

No debate that probate is worse: but it seems the requirements of the Living Trust is anyways more complicated than needs be. Why is it that property in my name and that has been designated as passing to a Trust Beneficiary must first have Title transferred ?

Because a trust is a separate entity from you. Think of it like a corporation. A corporation can only control, sell, transfer, etc, property that it owns. So if you own a corporation but want the corporation to handle property that you have you must transfer that property to the corporation. Likewise, a trust can only control, sell, and distribute, etc, property that it owns. When you die if you still own the property then the living trust you created won't have anything to do with that property. Any property you still own in your own name passes to your estate and gets probated. You'd need a will to control where that stuff goes. If you set up a living trust with the idea of avoiding probate then you need to have the property that you want the trust to deal with to be owned by the trust before you die. A trust without any property owned by the trust is known as a dry trust and dry trusts are worthless.

 

[stephenInCA]

> When you die if you still own the property then the living trust you created won't have anything to do with that property.

There's not much more to be said: the fact that no connection apparently exists between a person's property and their living trust even when explicitly called out is an artificial barrier. I am stuck with making real estate offers saying "Trust of .." to continually glue together pieces that should not be considered separate given the trust declarations: but there is not any choice. Well that was my suspicion but thanks to the responders to confirm this in any case.

 

[TrustUser]

you can still make offers using just your own name. how you hold title is taken care of in escrow

 

[FlyingRon]

I've bought and sold four or five properties that are co-titled between my and my wife's living trust. Indeed, the purchase contracts just list our names. The closing docs get the trust names. The only thing I have to "write" additionally is the word Trustee next to my name. The only real thing that gets asked for is copies of the trust documents from time to time. I have them in a PDF file so I don't have to kill a lot of trees in the process.

(The worse time was when my wife couldn't make the closing and I had to sign "FlyingWife by FlyingRon, her attorney in fact" on all the documents.

 

[adjusterjack]

Stephen, if your user name reflects that your properties are in California, look into transfer on death deeds:

https://duckduckgo.com/?q=california+transfer+on+death+deed&t=h_&ia=web

You still own the properties in your name. All you have done is name a beneficiary who becomes owner at the moment of your death, record the new deed and that's it.

It's very convenient, revocable, and avoids probate on the properties.

 

[FlyingRon]

If you simply want to transfer the property to a person on your death, as AJ says the TOD deed will work.
However, there are some downsides. You need to keep an eye on your beneficiary. If they predecease you there's no provision on the TOD for a secondary beneficiary. You need to change it in that case. A trust can have provisions for death of the beneficiary.

 

[stephenInCA]

TrustUser

> you can still make offers using just your own name. how you hold title is taken care of in escrow

That is v helpful!

adjusterjack and FlyingRon:

>transfer of death TOD

This is also useful to know: but since it involves updating Title anyways it seems not to have advantage over the Living Trust and I'd likely stick with the latter. If there any actual benefit to the former maybe clarify.

 

[adjusterjack]

>transfer of death TOD

This is also useful to know: but since it involves updating Title anyways it seems not to have advantage over the Living Trust and I'd likely stick with the latter. If there any actual benefit to the former maybe clarify.

The advantage is that you do it once (unless you someday want to change the beneficiary), it's easy to do, you remain in control, it's a lot easier for your heirs since ownership is transferred automatically by law without any paperwork. With a trust, somebody has to administer the trust, pay the debts of the estate, and execute a new deed from the trust to the heir. For most heirs that will require paying an attorney to do it.

Should you need financing while the property is owned by the trust, there are lenders who will balk and you'll have to deed the property back to yourself.