How Do I Transfer Property to A Trust?
In South Carolina a living trust is a revocable trust designed to avoid probate and provide long-term property management. A revocable living trust can be terminated or changed at any time during the grantor's lifetime. A trust should be finalized so that its existence is established before property is transferred into the trust.
In order to establish a basic living trust, the Grantor should prepare and execute a document called a declaration of trust, which is similar to a Last Will and Testament. The declaration of trust sets forth the terms and conditions of the living trust. In the document, the Grantor names himself or herself as trustee, and transfers assets to that trust . Because the Grantor is named as the trustee, he or she maintains full control over the assets.
After creating the living trust, the grantor should transfer personal assets into it. This is referred to as funding the trust. In order to transfer real estate into the living trust, a real property deed naming the living trust as grantee should be executed and recorded. Bank accounts, retirement accounts and life insurance policies can be also be transferred to the trust. A warranty deed or quit claim deed is commonly used to transfer real property to the trust.
Once a living trust is created the grantor, as trustee of the living trust, manages trust assets for his or her personal benefit as well as for the benefit of the beneficiaries. Even though the living trust is also managed for the benefit of beneficiaries, a trust beneficiary receives nothing until after the grantor’s death. Upon the grantor’s death, the successor trustee becomes acting trustee and passes living trust property to the beneficiaries without need of probate.
Assets not transferred to the living trust are subject to probate upon the grantor's death . So even if a person has a living trust, he should have a will, called a pour-over will. Pour-over Will is used to transfer or "pour" all of the grantor's remaining property into the living trust upon his or her death. A Pour-over Will is usually executed simultaneously with a living trust.
In South Carolina, Section 62-2-501 says that a person who is of sound mind and who is not a minor as defined in Section 62-1-201(24) may make a will. Also Section 62-2-502 says every will, shall be in writing signed by the testator or in the testator's name by some other person in the testator's presence and by his direction, and shall be signed by at least two persons each of whom witnessed either the signing or the testator's acknowledgment of the signature or of the will.
A deed is the written document which transfers title (ownership) or an interest in real property to another person. The deed must describe the real property, name the party transferring the property (grantor), the party receiving the property (grantee) and be signed and notarized by the grantor. In addition to the signature of the grantor(s), deeds must be acknowledged to be recorded and acceptable as evidence of ownership without other proof. A valid deed must be delivered and accepted to be an effective conveyance. Most states assume delivery if the grantee is in possession of the deed. The deed also must be accepted by the grantee. This acceptance does not need to be shown in any formal way, but rather may be by any act, conduct or words showing an intention to accept such as recording the deed. To complete the transfer (conveyance) the deed must be recorded in the office of the county recorder or recorder of deeds in the county in which the real estate is located.
There are many situations in which it may be desirable to add or delete a name from a deed, such as adding or removing a spouse, child or sibling. A person can only be deleted from a deed with their approval, i.e., they must execute the deed (sign and have their signature notarized). A quit claim deed is often used between family members when there is no doubt as to the ownership or claims on the property.
There are two basic types of deeds: a warranty deed, which guarantees that the grantor owns title, and the quitclaim deed, which transfers only that interest in the real property which the grantor actually has. The only type of deed that creates "liability by reason of covenants of warranty" as to matters of record is a general warranty deed. A quit claim deed contains no warranties and the seller doesn't have liability to the buyer for other recorded claims on the property. The purchaser takes the property subject to existing taxes, assessments, liens, encumbrances, covenants, conditions, restrictions, rights of way and easements of record. However, a person who obtains a mortgage is still liable for mortgage payments after executing a quit claim deed on the property securing the mortgage. The quitclaim is often used among family members or from one joint owner to the other when there is little question about existing ownership, or just to clear the title.