Is your real estate properly titled to your Revocable Living Trust?
I often meet new or potential clients who have established revocable living trusts before meeting me but haven't completed the crucial step of properly transferring their real estate into these trusts. This oversight can effectively undermine the primary benefits of trust-based estate planning, potentially forcing your estate through probate despite your careful planning. Let’s talk through the basics of ensuring that this is not a problem for your estate.
The Importance of Proper Title Transfer
Creating a revocable living trust is only the first step in planning an Idaho estate designed to avoid the probate court process. The trust must be "funded" by transferring assets into it, including your real estate holdings. In Idaho, this process requires specific documentation and recording to ensure legal validity.
Think of your trust as an empty vessel — it only protects and manages the assets you place within it. Real estate that remains titled in your personal name will still be subject to probate upon your passing, regardless of your trust's existence.
The Title Transfer Process
To properly transfer real estate to your revocable living trust in Idaho, several key steps must be followed:
1. Obtain a copy of your current deed
2. Prepare a new deed transferring the property to your trust
3. Ensure proper legal description and vesting language
4. Execute the deed with appropriate notarization
5. Record the deed with your county recorder's office
The new deed must specifically name your trust as the grantee, using precise language such as "John Smith, Trustee of the Smith Family Trust dated January 1, 2024." Informal or incomplete trust references can create title problems later.
In my practice, I take care of these steps for clients. However, I meet a lot of folks who have had their planning done elsewhere (or even worse — who have done it themselves with a book or online) and have not completed this vital part of the process. While online resources and DIY solutions abound, the complexity of real estate transfers to trusts warrants professional legal guidance. Small mistakes in documentation or process can create significant problems that may only surface years later when it's too late to correct them without significant cost and time.
Common Pitfalls to Avoid
Through years of practice, I've observed several recurring issues that property owners should be mindful of:
• Failing to notify your homeowner’s insurance carrier about the transfer
• Incorrect trust name or date on the deed
• Missing or incomplete legal description
• Improper execution or notarization
• Overlooking required transfer documentation
Special Considerations for Those Who Have Moved to Idaho from Other States
One of the most common issues I see is that when someone has established a revocable living trust in a different state and subsequently has moved to Idaho, their new Idaho real property has not been effectively titled to their trust. If left unaddressed, this will certainly lead to the need for probate involvement in an estate that otherwise would have stayed out of the court system.
Verification and Maintenance
After recording the deed, request a copy of the recorded document for your records. Periodically review your property tax statements to verify they reflect the correct ownership. If you refinance your property, be aware that lenders often require temporary transfers out of the trust, necessitating subsequent transfers back into the trust.
Ensuring your real estate is properly titled to your revocable living trust is a fundamental aspect of effective estate planning. While the process requires attention to detail and proper legal documentation, the benefits far outweigh the initial effort and expense. Regular review of your property titles and prompt attention to any necessary updates will help ensure your estate plan functions as intended when your family needs it most.
My law firm is currently offering free telephonic, electronic, or in-person consultations concerning creating or reviewing estate planning documents.
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Robert J. Green is an Elder Law, Trust, Estate, Probate, & Guardianship Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, powers of attorney, guardianships, Medicaid planning, or VA Benefit planning, contact Robert at 208-765-6555, Robert@KootenaiLaw.com, or visit www.KootenaiLaw.com.
This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.