In California, real property generally must be probated once the owner dies. Many people want to avoid the probate process because of the length of time it takes and the legal expenses involved. One way that people can avoid the probate process when they have real property they would like to pass to their loved ones is to establish a real estate trust and transfer the deed to their property to it. Here’s some general information about how this can be accomplished.
Establishing a Trust
The first step involved in estate administration and probate to avoid probating real property is to establish a trust to hold the real estate. The real property owner can create a living trust while they are still alive and assign themselves as the trustee of the trust. The trustee has the right to manage the property and other assets placed in the trust. When the grantor dies, the assets held by the trsut can pass directly to the named beneficiaries without having to go through the probate process. However, simply establishing a trust is not enough. The grantor must also correctly fund it.
Funding the Trust
To fund a real estate trust, the grantor must transfer ownership of the property to the trust. This can be accomplished by transferring the deed. If there is a mortgage on the property, the grantor must first get permission from the mortgage lender before transferring the property deed to the trust. To transfer the deed, the grantor will need to get an original copy of the property deed and insert the name of the trust as the owner. The grantor will need to sign the deed in front of a notary and then file it with the county recorder’s office.
While the process for transferring the deed to real property to a trust might seem straightforward, it is important for property owners to ensure they do it properly. Failing to fund a trust will mean that the property will still need to go through the probate process, and incorrectly transferring it could result in tax consequences or a cloud on the title.