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Moving real estate into a trust fund

California real estate can be a great investment. It makes sense to keep your portfolio in the family and protect it by adding it to a trust. Transferring real estate into a trust is pretty simple when the property has been paid off and a little more complicated when there is a mortgage involved.

Transferring the property title

If you own a piece of the real estate outright, you can transfer the property title into a trust by creating a new deed. The new deed will be just like the old deed except that the name will be changed from the original owner to the name of the trust. You can usually complete this process through the local Registry of Deeds.

The process of transferring the property title involves signing the new deed in front of a notary public. Your original deed may also specify how many witnesses are required to be at this signing.

While the trust will become the official owner of the property, the trustee will assume all responsibilities for the property. The trustee is the beneficiary of the trust, and this person must agree to pay all bills associated with the property.

Trust funds and probate

When real estate and other assets are moved into a trust, estate administration may be simpler. That is because assets in a trust are distributed according to the trust document and do not go through probate court.

Transferring property with a mortgage

You should not attempt to begin the process of moving a real estate asset into a trust if there is a mortgage attached to the property. First, you must obtain approval to do this from the mortgage company. If the mortgage company approves, there will likely be several documents to sign before the property title can be changed.