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How to Put a Property in a Trust (Tutorial and Examples)

Sophia Merton
August 16, 2022

Though thinking about our own death isn’t anyone’s idea of a good time, it’s important to plan out what is going to happen to your assets when you pass away. Through simple estate planning, you can help to protect your loved ones and make sure more of your money stays in the family while also ensuring that they don't have to endure the stress and complexity of probate court. If you own real estate, you might be wondering how to put a property in a trust.

Many people mistakenly think that estate planning is only for the rich, but that simply isn’t true. If you own real estate that you want to transfer to your beneficiaries efficiently and quickly after your death or incapacitation, creating a living trust is one of the best ways to ensure that outcome.

Rather than making your heirs go through a lengthy and costly probate process, and exposing private financial details into the public sphere, you can put your property and other assets in a trust in a way that will likely lighten the burden on your family when they are mourning your passing.

Let’s take a look at what you need to know about putting property in a trust and how to do it.

What Is A Trust?

A trust is a legal vehicle through which one party, known as a grantor or a trustor allows a third party to direct and hold assets on behalf of a beneficiary in a trust fund. The third party in this arrangement is known as a trustee.

door window and flower basket of home in a trust

Trusts are a way for the trustor to:

  • Legally protect their assets
  • Make sure their assets are distributed based on their wishes
  • Reduce paperwork, save time, and potentially avoid or reduce estate taxes

The trust is overseen by the instructions of the grantor by the trustee, who manages the assets on their behalf.

Creating a trust means that you have to create a legal trust document and often requires the help of an attorney.

Why Do People Put Property in a Trust?

People primarily put a property in a trust because it can simplify the process of passing your assets on when you pass away. If you don’t do anything to make this process less complex, your assets will go through the probate process.

keys hanging in an open door of a property in a trust
Putting real estate in a trust means that your heirs don't have to wait for the probate process in order to gain ownership of the property.

Probate is a process that occurs when you die in order to sort out how to divide your estate. Your assets will be used to pay for any taxes or debts that you owe during the probate process. Once those bills are dealt with, all of the property that you have will be distributed based on what is stated in your will.

People that pass away without a will are leaving the division of their property up to state laws. This means that the state laws regarding intestate succession will dictate to whom your various assets go to.

Probate can take a long time, which is part of the reason that people want to avoid this process when they can.

If your estate is fairly simple, the probate process might take only a few months. For people with complex circumstances or large estates, though, the process can last as long as one year or even two years in the case that your will isn’t contested.

If your will is contested, going through probate can take even longer than two years.

When you take all of the legal expenses, administrative costs, and court fees into account, probate can start getting pretty expensive, too.

You normally name yourself as the trustee when you put your property in a trust, at least in the case of a revocable (or living) trust (we’ll talk about the difference between a revocable and irrevocable trust a little later on.)

On top of that, you’ll name someone to take on the role of trustee when you die. This is known as your successor trustee.

When you pass away, your successor trustee will have to distribute the assets in your trust based on the instructions you created.

Many people find that putting property in a trust helps to ease their minds in terms of what will happen to their home when they pass away. They can have more certainty that the person they want to own their home after their death will easily be able to obtain ownership.

Of course, you can name a beneficiary in your will to pass your home on to them. However, they will have to wait to go through the probate process first.

Putting your property in a trust can also help to protect the asset if you were ever to deal with a circumstance where you become incapacitated.

Should You Set Up a Trust If You Already Have a Will?

A common question about trusts is whether or not you need to set one up if you already have a will.

The answer depends on your personal situation, including your own needs and the needs of your family members.

exterior of modern home in a trust
If you are interested in passing your most valuable assets along to your beneficiaries quickly after you pass, you might consider putting them in a trust rather than only listing them in your will.

A trust is usually a quicker way to pass your assets onto your spouse, children, or chosen beneficiaries. The process is also much more efficient. That being said, it also tends to be more costly than creating a will.

It’s common for estates that are planned well to use both wills and trusts. Some people might choose to put only a handful of their most valuable property into a trust, such as real estate property. If they go this route, it means that everything else will be determined by their will.

For some individuals, it makes sense to only put the most vital assets in a trust and let the rest of their estate go through the probate process.

Different Types of Trusts For Estate Planning

There are a lot of different types of trusts. However, irrevocable and revocable trusts are the two primary categories of trusts you’ll want to become familiar with as you’re beginning your research process.

Irrevocable Trust

Once you have executed an irrevocable trust, it can’t be terminated or changed. When you create this type of trust, it means that the trustee takes control of the assets and you give up ownership of all of the assets you put into the trust.

Since you don’t have ownership of the asset anymore, it’s not considered to be a part of your estate. This means that it is usually not vulnerable to creditors that are trying to chase you down or to an estate tax.

While those are some compelling reasons to set up a trust, you’ll definitely want to fully understand what it means that you won’t legally own the assets anymore. It’s always a good idea to talk to an attorney when thinking about setting up an irrevocable trust.

Revocable Trust

Sometimes called a living trust, a revocable trust is one that can be terminated or changed during your lifetime. In short, it can be “revoked.”

inside of home that is in a trust as estate planning tactic
Revocable trusts are easier to set up than irrevocable trusts, and they can also be modified or terminated while you are still alive.

People usually act as their own trustee in a revocable trust. They will then name another individual to be their trustee when they pass away or if they become incapacitated.

When they’re still alive, they still have control over all of the assets that were placed into the trust.

Once they pass away, though, the revocable trust turns into an irrevocable trust. They’ll leave a set of instructions for the person that they named to be their successor trustee, who will be responsible for controlling and managing the trust based on the instructions that were left for them.

One important difference between revocable trusts and irrevocable trusts is that the former typically doesn’t protect the assets from creditors. On top of that, revocable trusts are usually still subject to estate taxes.

How to Put Property in a Trust

The following instructions are primarily based on the steps you would take to put a property into a living trust. It’s important to understand that there are different laws regarding estates and trusts, and it’s typically advisable to work with a lawyer in some capacity when putting a property in a trust.

Create a Trust

The first step to putting property in a trust is to create a trust.

If you want to create a living trust, you’ll need to pick an individual that will be your successor trustee. Once you pass away, they will take control of your assets and follow the instructions you outlined in the trust.

Additionally, you’ll name your beneficiaries. These are the people that receive your assets based on the instructions you left.

When you’re picking a trustee to take over when you die, you’ll want to pick someone that you trust. This can be a family member or friend– basically, you can choose whoever you’d like.

For those of you that have complicated estates, it can be a good idea to hire a trust company or an experienced attorney to be your successor.

Prepare Your Trust Agreement

Once you’ve made these vital decisions, you can prepare your trust agreement. In this document, the specific details of the trust are outlined.

There is a lot of standard, template trust agreements that you can find on the internet. Depending on your situation, though, you might find that it’s more appropriate to hire an attorney to create the trust documentation on your behalf.

Notarize Your Trust Agreement

Ensuring that your trust is considered to be legally valid is essential when you’re putting property in a trust. After all, you’re going to all the trouble to help make the process of passing your assets on to your heirs more efficient and straightforward. If you don’t go through the proper process of making your trust legitimate, your beneficiaries won’t be able to escape the legal complexity you tried to help them avoid.

This means that your trust will need to be signed in front of a notary public. These are individuals that act as third-party witnesses to the signing of important documents. A part of their job is attesting to the fact that all of the parties involved signed the documents willingly and voluntarily (i.e., no one forced or coerced them to sign the documents against their will.)

Prepare the Deed

The next step is to fill out a new deed to reflect the arrangement outlined in your trust. It’s common for state-specific property forms to be available online. A lawyer can also help you fill out a new deed and complete this step in the process as well.

If you can’t find the deed form you need online and you don’t want to hire an attorney, you also might be able to get the proper deed form from a local law library. You’ll want to search for books on the topic of “real property” that include the forms you are looking for.

For revocable trusts, you can use a grant deed form or a quitclaim deed form.

There is some variation between deed forms. However, the same general information will be required for all of them.

Some of the info you’ll need to complete this document includes:

  • The name of the current owner: If you co-own the property with your spouse and you are transferring it to a shared trust, you will want to put both of your names here. If you’re only transferring your share of the property, only list your name. The same is true if you are the sole owner. You’ll want to write your name in the exact same way it is written in your living trust document and that is used on the deed that transferred the property.
  • The name of the new owner: You’ll want to fill out the name(s) of your trustee(s) in the exact same way it is recorded in your trust document’s first paragraph. In a revocable trust, this is usually your own name. You’ll also want to record the date that the trust document was signed with a notary public as a witness.
  • The property’s “legal description”: When you are filling out this part of the form, you will want to exactly copy the description as it is written on the previous deed.

If you’re transferring only your share of a piece of property that you co-own, you’ll need to state that only a share of the property is being transferred with the legal description.

Remember, different states have their own laws when it comes to trusts. For this reason, it’s essential to check in with your specific state laws. For example, it is particularly advantageous in the state of Colorado to hold real estate under the name of the trust itself, rather than that of the trustee.

Record the Deed

The deed will then need to be recorded after it has been completed and signed in front of a notary. Recording the deed basically means that you are putting a copy of the notarized deed on file with the local property records office in the county.

In many places in the US, this office is known as the county clerk’s office, the county recorder’s office, or the land registry office.

To record the deed, you’ll want to bring the original deed that was signed in front of a notary to the appropriate county office. The clerk will make a copy and file it in the public records for a small fee.

You will then receive the original deed back. It will have a reference number stamped on it that indicates where in the public records a copy of the deed can be found.

Transfer Taxes

When you transfer property to yourself as trustee, you usually don’t have to pay a local transfer tax or a state transfer tax in most places. Usually, real estate transfer taxes are based on how much a piece of property is sold for, and don’t apply if there isn’t any money exchanged.

In some places, transfers, where the real owners don’t change, are specifically exempted.

You’ll want to get more information regarding taxes from the county recorder, county tax assessor, or state tax officials before you record your deed. This information can now be found online in a lot of U.S. counties. Take a look at the website for your county to see if they have put this information online.

Report the Change to Your Insurance Agent

You’ll need to call your insurance agent to let them know about the change when you have transferred real estate ownership. How much your policy costs shouldn’t change, nor should your coverage. However, your insurer will change its records to reflect the new arrangement.

A Note on Due-on-Sale Clauses

It’s normal for mortgages to have a clause that lets the lender demand that you pay off the entire loan immediately when the property is transferred. This is known as a due-on-sale clause.

In most cases, luckily, federal law forbids lenders to invoke this type of clause when a piece of property is transferred into a revocable trust.

If the borrower is a trust beneficiary and the transfer of the property is “unrelated to occupancy” of the property, the lender isn’t allowed to call the loan.

Pros and Cons of Putting Property in a Trust

Putting property in a trust definitely has both its advantages and drawbacks. Your particular circumstance will inform whether or not putting real estate in a trust makes sense for you. Let’s look at some of the pros and cons to help you weigh out whether this is a reasonable course to consider for your estate.


Keep Your Finances Private

If you value your privacy, particularly when it comes to financial matters, you might find that it is worth it to put your property in a trust. When you have a living trust with your assets in it, there is no probate court process. This means that your assets don’t become public.

If your house is just listed in your will, on the other hand, information about your property and assets will be made public once the contents of the will are entered into probate court.

When it comes to a living trust, usually the only people that ever see it are the beneficiaries that you name. Even in this case, they don’t see the trust information until after you die.

Avoid Probate

Definitely one of the most obvious advantages of putting property in a trust is that you can avoid going through the process of probate.

People want to avoid probate for a number of reasons, namely that probate:

  • Can be very costly
  • Can take a long time to complete
  • Is public

There are a number of costs that usually have to be paid before your assets are divided up amongst your heirs. These include:

  • Executor fees
  • Legal fees
  • Inventory fees (county taxes)
  • Additional costs

For people that own property in a number of different states, their estate might go through multiple probate processes. Each of these will proceed based on the state laws in each state.

A common estimate is that 10% of a person’s estate will have to go toward the various costs of probate.

If your estate isn’t very big, though, the percentage that has to go towards these costs can be much larger.

In general, it is a lot cheaper to do some simple estate planning instead of sending all of your assets through probate.

In many cases, probate takes at least five months to complete. Even for simple cases, though, it can take between nine months and a year for simple cases to be resolved. For contested cases, the process can take several years.

Finally, there’s the issue of privacy. If your estate goes through probate, it means that anyone can see the size of your estate. They can also see who is going to receive your assets, to who you owed debts, and when your beneficiaries will receive your assets.

Even if you aren’t that concerned with the general public knowing about your finances, it’s worth understanding that this process can encourage other heirs to contest the will because they are upset with how the assets are divided. On top of that, your family can end up being exposed to creditors and fraudsters.

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Incapacity Protection

A living trust can also help your family avoid undergoing a conservatorship if you become incapacitated. A conservatorship is when a person’s financial matters are handed over to a court-appointed guardian.

Going to court in order to gain access to an incapacitated person’s financed isn’t a pleasant process, particularly because it occurs during a time of personal difficulty. Setting up a living trust can help families avoid having any unnecessary issues to deal with when they are already dealing with the tragedy of a recently incapacitated family member.

If a trust is owned by a married couple, the acting trustee usually becomes the second spouse if one becomes incapacitated. If it’s an individual trust, the person that is named as the successor trustee can manage the assets and take over control of the trust.

It’s worth noting that the new acting trustee also needs to have the power to manage any finances and property outside of the trust if this is what you would like to happen. In order to accomplish this, it’s prudent to have a durable power of attorney for finances in addition to your revocable trust.


Record Keeping

Accurate written records will need to be kept if you transfer property in or out of a trust. This isn’t a particularly difficult task, but it is another thing to keep track of. If it’s been a few years since you first started the trust, it can be easy to forget about the need to keep records in this way.

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While many people feel that setting up a trust is worth the work, doing so will certainly require extra paperwork than if you just kept the property ownership as it currently stands.

You will need to make sure that the ownership of your property is transferred legally to the trustee (which is usually you) in order for your living trust to be effective. The title of your property will need to be changed to reflect that the trust now owns the property.

The process of doing this is described earlier on in the article and involves preparing and signing a new deed and transferring ownership of the property to yourself as the trust’s trustee.

Many people find that the cost of extra paperwork and the need to keep records is well worth it in exchange for having peace of mind when it comes to their estate.

Complexity and Cost

Depending on your goals and how you want to go about creating a living trust, the complexity of the process and the cost can vary widely. You don’t have to hire a lawyer to help you create your trust, and there is online software you can use that helps to keep costs down. However, your living trust is important enough that it’s important that it’s done right, so cutting costs shouldn't be the only concern.

It will typically cost at least $1000 to hire an attorney to help you create a trust, and more than that if you are a part of a couple. The specifics of your estate will have a big impact on how much it costs to set up a living trust.

That being said, probate can be incredibly expensive, particularly for smaller estates when you consider the percentage of the estate that is going towards costs and fees.

In many instances, more money can stay in the family when you practice simple estate planning ahead of time.

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Should You Put Your Property in a Trust?

If you want your house to avoid probate after you die, a living trust is a good option. Going this route also means that your heirs can get their inheritance faster and with fewer probate costs. If you are primarily concerned with avoiding or minimizing estate taxes, you’ll want to talk to an attorney about setting up an irrevocable trust, as well as the pros and cons of that type of trust. You can also use this type of trust to help you qualify for Medicaid by reducing your taxable estate.

Putting your property in a trust is a big decision, particularly an irrevocable trust. It’s a good idea to talk to an attorney to determine whether or not this is a good avenue for you to take when it comes to your estate.

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Written By:
Sophia Merton
Sophia received her BA from Vassar College and is a real estate investor and researcher. With more than ten years of experience owning and managing investment properties, she has gained valuable insight into the pros and cons of operating rentals. Sophia is dedicated to helping others create wealth through real estate and aims to provide straightforward information about every aspect of rental property ownership.
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