How do you put your home into a trust? I’m attorney Sarah Siedentopf and that’s exactly what we’re going to be discussing in this video.
How do you put your house into a trust?
So the very first part of this is obviously that we have to have a trust. What is a trust? A trust is a legal document that sets up a grantor, sometimes called a settler, or something else. But you, you put your stuff into the trust, and you choose trustees to manage the trust. That can be you. That can be someone else depending on the type of the trust, but there’s a trustee or trustees managing the trust. And then there are beneficiaries who get to use the things in the trust. And those, you know that beneficiary might be you, might be someone else, might be, you know you and your whole family. Then of course, after you’ve passed on it’s going to be you know whoever you’ve chosen. But it is a legal document, a legal entity, and you’re going to have it you know, signed, witnessed, notarized. So we’ve set up a trust.
So after we have a trust, how do we get that house into the trust?
This is going to be an actual transfer of deed from your name to you as trustee of the trust or, you know, whoever is acting as trustee of the trust. And so in Georgia it is important to say so and so as trustee of the such and such trust, as opposed to just the such and such trust. It’s not, it’s not fatal at this point if it’s not done that way, but that is the preferred way of doing it. So you will have a deed, and it does have to be notarized. And there has to be a witness transferring the house with, you know, with full legal description and basically very similar to what you signed when you bought the house.
You have a deed transferring the house into your name, and then now you’re doing a deed transferring the house from your name to the name of the trust. That has to be filed with the land records here in Georgia. That’s going to be in superior court for the county that you live in or that the property is located in. There will also have to be what’s called a PT-61. That’s a tax transfer document that needs to be filed so that they can make sure that they’ve properly calculated the taxes for the transfer, depending on what type of transfer it is. In a trust, transferring your property into your trust is usually going to be a gift. So it’s most of the time unless there is a sale or something else related there, a lot of times there is not a transfer tax, but the tax document has to be, you know done and filed regardless. And then once, once that has been done you’ll get it marked by the clerk’s office, you know, as filed. That is what has placed your home into your trust.
Could this cause issues with your mortgage?
Now you may wonder and may have heard that there’s a possibility that putting your house into your trust may cause a problem with your mortgage. That can be true depending on what type of trust you have. But if you have a revocable grantor trust where you are the grantor, you are the trustee, and you are the initial beneficiary. So it’s very important that you be the initial beneficiary during your lifetime. But as long as that is true, there is a specific federal law that prohibits mortgage companies from calling the mortgage, AKA telling you it’s due immediately. So there will not be a problem with transferring it into this specific type of trust. If you have a different type of trust in mind, obviously you’re going to want to consult an attorney and make sure that it’s not going to cause a problem with your mortgage. But a revocable grantor trust that you are the beneficiary of is not a problem. And so you can transfer it without worrying about your mortgage. And so I hope this has been helpful.
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