If you don’t already have one, please consider preparing a revocable trust. My clients return to me all the time asking to list a property that was left to them by a loved one that has deceased. In working with these customers, I have found that the majority of people in the upscale communities of Santa Barbara have a trust; but many neglect to actually place their assets into it. This can cause your loved ones months to years of unnecessary grief when the property goes to probate.
Deeding your real estate into a trust isn’t always as simple as signing, notarizing and documenting a standard legal form. Keep in mind; revocable trusts don’t take full effect until they are funded.
A revocable trust is a legal entity created to hold a property for you. The idea behind a trust is that it is separate from you and doesn’t die when you do. This lets assets owned by the trust avoid the probate process and pass to your heirs more quickly, and with little or no cost. The unique feature of a revocable trust is that you can retain total control of it while you’re alive, giving you the same flexibility that you’d have if your assets weren’t in the trust, while still assuring that, when you die, your wishes will be carried out.
Once you’ve created a trust, you must execute a deed to put the property into the trust. Frequently, you will sign a grant deed, which is the same form of deed that you probably got when you bought the property. In the grant deed, you will give the property to yourself as trustee of your trust. As with any other deed, have your signature notarized and take the signed deed to your county to have it recorded. Title to all property that is owned by a trust is actually owned by the trustee of the trust. You should check with a local attorney to determine the particular type of deed that should be used to transfer title to the trustee.
Even in light of a recent ruling by California’s Fourth Appellate District Court of Appeal (Ukkestad v. RBS Asset Finance, March 16, 2015), doesn’t undermine the importance of deeding your real estate into your trust. Specifically identifying the property in the trust (or in an attachment) and correctly placing it in the trust is still the best practice. For more information on why you need a revocable trust, read this article in RealityTimes and before you do anything make sure you consult your attorney and or tax advisors. For more information on buying or selling real estate in Santa Barbara, Montecito and Hope Ranch, check out my website. I can be reached at 805.886.9378 or email me at Cristal@montecito-estate.com.