• Quitclaim Deed vs. Warranty Deed.

• Warranty Deed: In a warranty deed, you as the grantor (or seller or transferor) guarantee that you own the property free and clear of any encumbrances (or liens or debts or claims) and have the right to transfer the property. If the guarantees turn out to be incorrect, then the grantor/seller could be sued for compensation. Warranty deeds provide greater protection when transferring real estate.  Transferring you real estate into your Trust via a Warranty Deed provides a measure of protection that the transfer will not be jeopardized 'after the fact' because of mistakes that might create a 'chain of title' problem, or difficulty obtaining title insurance, or even make a future sale more difficult or even impossible.

• Quit Claim Deed: In a quitclaim deed, the grantor does not make any guarantees. You as the grantor transfer the property (or partial interest) to another person(s) or entity (such as your Trust). Quit Claim deeds are often used to transfer property between family members or as a result of a divorce.  A Quit Claim deed my be the only means to transfer real estate with a title defect.

• Recording the Deed. Deeds should be recorded at the appropriate county recorder/registrar’s office immediately after the deed is signed.  Each county has different rules, standards, and even margin requirements.  Often a local title company can be your best resource for making sure your deed is properly recorded in your county.

• Community Property States. If you are married and live in a community property state, there may be tax advantages for you to re-title jointly owned assets as community property before you put them into your Trust. Contact your attorney or tax advisor for more information.

• Insurance Policies. (Title, Homeowner’s and Liability Insurance). Contact each insurance company to add your trustees (you and your spouse) as well as the Trust as insureds on each policy. With title insurance, contact the insurer before you make the transfer. In some cases, title insurance will not allow for a transfer of ownership, in which case you may need to replace your existing policy with a new title insurance policy.  Often a local title company can be your best resource for making sure your title insurance is properly transferred or replaced.

• Refinancing and Home Equity Loans. If you plan to refinance your property or obtain a home equity loan, you may have to temporarily transfer the property from the Trust back to yourself, sign the loan paperwork and then you can transfer the property back into your Trust. Do not forget to transfer the property back into your Trust!

• Due-on-Sale or Alienation Clauses. If you have a mortgage on your property, you should obtain your lender’s written consent if the loan has a due-on-sale or an alienation clause. A due-on-sale clause allows the lender to require full payment of the outstanding balance of the loan if the property is transferred without the lender’s consent. An alienation clause is similar, in that it accelerates payments and may change other terms if a transfer is made without lender consent.  Under federal law, a due-on-sale clause normally cannot be enforced in the case of a principal home if the grantor transfers property to a living trust and is a beneficiary of that trust. However it is much safer to obtain consent from the holder of the mortgage or deed of trust before transferring the property. If you are transferring property with a mortgage that is not your principal residence (for example, additional residences, raw land or business, agricultural or commercial real estate), you will want to first obtain consent from the holder of the mortgage or deed of trust.  Often a local title company can be your best resource for making sure your property is transfered properly.

• Property Tax Reassessments. Many states will not require a tax reassessment if you transfer property into your Trust and you are the Trustee of the Trust.

• Property Tax Exemptions. If you are receiving a state or local property tax exemption on your home, check with your tax advisor to verify if the exemption will continue after the transfer. If not, you should discuss alternative strategies with your tax advisor or attorney (such as signing your deed but not recording it).

• Deducting Mortgage Interest. Transferring real estate into a Trust should not prevent you from deducting mortgage interest on your Federal income taxes.

• Timeshare and Partial Interests. You can transfer timeshare interests, ownership percentages and partial real estate interests into your Trust. In the case of a timeshare or other collective ownership arrangement, check with the resort or management company to determine if there are any restrictions on the transfer of ownership, whether consent is required, whether there are any transfer fees, and what information they need to recognize the transfer. A timeshare interest can be created by deed, license or lease. If your timeshare interest was created by deed, a new deed will have to be prepared and recorded to transfer your interest. If your timeshare interest was created by license or lease, the license or lease will be transferred by an Assignment document, or a new license or lease will be created, to transfer your interest.

• Tenancy by the Entirety and Liability Exposure. If you and your spouse currently hold real property as a “tenancy by the entirety” and one or the other spouse has significant liabilities, you may lose certain protections from creditors if you record the deed that transfers the property to your Trust.  The laws in this area are complicated and vary from state to state, you should speak with an attorney before taking any action.

• Homestead Rights. Homestead rights provide protection to a principal residence against creditors. Whether you have homestead rights, and whether those rights would be affected or lost by transferring your home into a Trust, will depend on the laws of your state. Check with an attorney in your state if you are concerned about bankruptcy, creditor claims or losing a homestead exemption. In addition, a homestead exemption will not apply for Medicaid eligibility if the home is owned by a trust.

• Marital Property Owned Before 1976. If you and your spouse have owned a piece of property from before 1976, a full step-up in basis may apply to the property when one spouse dies. The step-up could be lost if you transfer the properly to a trust. If you think this may apply to you, check with a tax advisor before you transfer title to your Trust.

• Property in Other States. You will want to transfer all real property you own into your Trust, including property you own in other states. If you own property in another state, you will need to record the deed for that property in the state and county in which that property is located.

• Interest in a Land Trust or Deed of Trust. If you are an owner or beneficiary of a land trust, mortgage or a deed of trust (for example, you made a loan that is secured by a mortgage or deed of trust), you will want to transfer ownership to your Trust using an Assignment document. The Assignment document should be recorded in the same county recorder/registar’s office as the mortgage, deed of trust or land trust document.

• Recording Fees and Transfer Taxes. Most states do not consider the transfer of real property into a trust as a sale and, therefore, do not impose taxes on the sale. However many counties charge a nominal recording fee or tax to record a deed. The fees for transferring property are different from county to county. Check with the county assessor or recorder’s office to determine what local, county and state fees and taxes will apply.

• Other Documents. In addition to the deed, the county recorder/registrar’s office may require one or more other documents to be submitted or recorded depending on the state and county. For example, an “affidavit of value” or “change of ownership” form may be required when a deed is recorded. Check with the county recorder/registrar’s office to determine what documents must be submitted or recorded with the deed.