How do I transfer real property to a living trust?
Full Question:
Answer:
A living trust in Texas is revocable meaning it can be terminated or changed at any time during the Grantor's or Grantors' lifetime. The Grantor(s) typically retain control over the assets in the trust. This retention of control usually has implications with the IRS who usually does not treat the assets (and transfer thereof) any differently for income tax purposes.
The living trust is create with the execution of Declaration of Trust by the Grantor(s). The declaration will detail the terms and conditions of the living trust, including who will serve as the Trustee.
Once the trust is created, assets are transferred to it. This is called "funding the trust." If real estate is to become part of the trust, a deed must be executed properly, naming the Trust as the Grantee. The deed then must be property recorded.
Texas statutes and case law dictate five requirements for a valid deed. It must:
(1) be in writing,
(2) be subscribed (signed by the grantor at the end of the document),
(3) include the grantee’s name,
(4) contain the legal description of the property and
(5) be delivered to and accepted by the grantee.
For a deed to be recorded (or registered), the grantor’s signature must be properly acknowledged or witnessed (Texas Property Code, Section 12.001[b]). An acknowledgment is a statutory procedure whereby persons signing a document declare their action before a qualified person, usually a notary public. The purpose is to authenticate the instrument, the identity of the signers and their signatures. Persons qualified to take acknowledgments referred to in this article as “notaries”) are listed in Chapter 121 of the Texas Civil Practices and Remedies Code. The list varies, depending on where the deed is signed. If signed in Texas, the
acknowledgment must be before a notary public, district court clerk, or the judge or clerk of a
county court.