How do I transfer real estate into a trust?
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Okay if you are transferring real estate into a trust then you can't simply list in your trust that 123 Elm Street is owned by the trust. That doesn't transfer legal ownership. People often make that mistake and then find out later that it doesn't work that way.
You actually have to have new Deeds prepared from you personally as Grantor transferring the property over to the trust as Grantee, in care of the trustee of your trust. Once you sign the deeds in front of a notary and record them in the local land Records Office that legally transfers ownership to the trust.
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Do I need to name the assets in my trust documents, or can I just move assets into the trust, and those assets would then be protected?
I understand the importance of protecting your assets. Have you already created a trust document?
I believe so I went through the trust steps
Are you looking to transfer specific assets into the trust or all of your assets?
Well will be transferring my real-estate into the trust, but I am also going to purchase more realestate in the future
Is there anything else the Estate Lawyer should know before I connect you? Rest assured they'll be able to help with asset protection.
I will also be creating LLCs for the properties so that I can build business credit so that I can expand I want to create those LLCs under the trust if possible. I have that document.
Hello and welcome to the site! My name is Barrister and I am a licensed attorney and I am here to help with your situation. I know your question is important, but there may be a short delay in my responses as I type out an answer or reply as I am typically working with several customers at once on the website. I have read your post and I am sorry to hear you are having to deal with this situation as I realize it can be frustrating and confusing.
Can you tell me what type of assets you are talking about? Are you talking about real estate or things like financial accounts or personal property?
I own 3 rental properties. I also want to create an LLC under the trust for those properties to build business credit and purchase more real estate.
I want to structure this properly so that the assets are protected, and I can add to the portfolio of the trust.
Okay if you are transferring real estate into a trust then you can't simply list in your trust that 123 Elm Street is owned by the trust. That doesn't transfer legal ownership. People often make that mistake and then find out later that it doesn't work that way.
You actually have to have new Deeds prepared from you personally as Grantor transferring the property over to the trust as Grantee, in care of the trustee of your trust. Once you sign the deeds in front of a notary and record them in the local land Records Office that legally transfers ownership to the trust.
If you want to get extra complicated, you could transfer the properties from yourself personally into an LLC that you set up, and then transfer ownership of the LLC to the trust so the trust owns the LLC and the LLC owns the property and you own the trust.
Oh man this is complicated. I don't want to trigger the bank to ask for the balance on the one mortgage I have on one property.
Since you own the trust that you would be transferring the property into, that will not trigger any due on transfer clause for the bank. You don't even have to notify the bank because the property stands as collateral for any loan regardless of whose name is on the deed.
What would be your recommendation on how to structure this? The reason I am doing this is because I want to avoid Gains Taxes on my beneficiaries should I die, and I am also divorced with a 6yr old son. I would not want his mother to take control of his assets.
I can't really engage in financial planning for customers because I can't represent you as your attorney.
But if you're looking to leave your properties to your children without any capital gains being imposed then if you have the assets inside a revocable living trust when you pass away with your children named as beneficiaries then that would accomplish that goal.
And you would want to name a successor trustee to take over the trust to manage any assets in it for the benefit of your minor child until they become an adult if you should pass while the child is still a minor.
Do the assets need to be named in the trust, or can I just transfer them into that trust and they will be protected?
I ask because I am planning on purchasing more properties and need to know if I will need to update the trust each time I get a new property, or can I simply put the titles in the trust and they be protected?
I know you said you cannot engage in financial planning and if you can't answer the following I understand.
Can I form a trust and have my properties named in that trust, and have an LLC in that trust as well where the LLC is the business side of my real estate portfolio that collects rent and distributes funds?
Do the assets need to be named in the trust, or can I just transfer them into that trust and they will be protected?
If you transfer deeds into a trust then the deed shows the trust owns it. You can put a list of assets that the trust owns in the trust documents if you want but it's not mandatory.
Can I form a trust and have my properties named in that trust, and have an LLC in that trust as well where the LLC is the business side of my real estate portfolio that collects rent and distributes funds?
If you mean have the Trust on the real estate and then have the Trust on an LLC that manages the properties then yes, you can do that.
Do you know or are you able to answer questions as far as tax implications?
And I just want to say thank you! I have been meaning to do this for years and your knowledge is greatly appreciated!
That I'm not qualified to do because I'm not a tax law attorney and can barely stay out of jail filing my own taxes. But there are CPAs and accountants on the website that would be able to assist if you post a question in the tax category.
OK great!
You are very welcome. Glad I could help. It was my pleasure to work with you and help with your question.
I have another question when it comes to asset protection.
If I create two trusts, one for the properties, and another for the LLC, would my properties be more protected if I was to be sued by a renter whom has a lease agreement that was through the LLC?
If the LLC signs the lease, it is the landlord so if a tenant sued, they would sue the LLC.
But your best simple protection without going through all this complicated maneuvering is to have a blanket liability policy of a half million or a million dollars on all your rental properties. That way if someone sues you insurance steps in covers everything.
Thank you!
Glad to help. Be safe.
