Creating a revocable living trust is only part of the process.
For the trust to actually control your real estate, the property must first be properly transferred into the trust.
This step is commonly referred to as funding the trust, and it is one of the most overlooked parts of estate planning in Maryland.
Creating the Trust Is Not Enough
Many homeowners believe that once a trust is signed, their home automatically becomes part of it.
In reality, the trust only controls assets that are actually titled in the trust’s name.
If the deed is never updated:
- The property may still go through probate
- Ancillary probate may still be required
- The trust may not accomplish its intended purpose
This is one of the most common estate-planning issues that surfaces after death.
How Property Is Transferred Into a Trust
To place real estate into a trust, a new deed must generally be prepared and recorded.
The deed transfers ownership from:
- The individual owner(s)
to - The trustee(s) of the trust
The deed must:
- Be drafted correctly
- Use the proper legal description
- Reference the trust accurately
- Comply with Maryland recording requirements
For Maryland real property recording information, visit: https://www.mdcourts.gov/legalhelp/landrecords
Are Transfer and Recordation Taxes Owed?
In many situations, transfers into a revocable living trust can qualify for exemptions from Maryland transfer and recordation taxes.
However:
- The exemption must apply legally
- The deed must be structured properly
- The correct exemption language must be included
Mistakes in this area can create:
- Recording delays
- Unexpected tax assessments
- Future title problems
For Maryland transfer and recordation tax information, visit: https://www.mdcourts.gov/clerks/cecil/recordingfees
Why Proper Deed Preparation Matters
A trust transfer deed is not simply a fill-in-the-blank form.
Common issues include:
- Incorrect trust names
- Missing or defective legal descriptions
- Improper vesting language
- Failure to address existing ownership structures
These problems often are not discovered until:
- A refinance
- A future sale
- Or after the property owner’s death
At that point, correcting the issue can become more expensive and time-sensitive.
What Happens If the Property Is Never Transferred?
If a trust exists but the property remains titled in the individual owner’s name:
- Probate may still be required
- The trust may not avoid ancillary probate
- Additional legal proceedings may become necessary
For further information about ancillary estates and out-of-state property issues, visit:
https://gentileproplaw.com/what-is-an-ancillary-estate/
Should You Transfer All Property Into a Trust?
Not necessarily.
Whether property should be transferred into a trust depends on factors such as:
- The type of property
- Existing financing
- Estate planning goals
- Tax considerations
- Ownership structure
The analysis is often more nuanced than many online articles suggest.
The Bottom Line
A revocable living trust only works properly if it is fully funded.
For real estate, that means:
- Preparing the correct deed
- Recording it properly
- Ensuring title aligns with the estate plan
Without that step, the intended probate and estate-planning benefits may never be achieved.
Need Help Transferring Property Into a Trust?
If you:
- Recently created a trust
- Own real estate in Maryland
- Want to avoid probate complications
- Or are unsure whether your property is properly titled
Careful deed preparation and trust funding can help ensure the estate plan functions as intended.
For more information about deed transfers and estate planning, visit:
https://gentileproplaw.com
To discuss your situation, you may contact Gentile Property Law Office, LLC here:
https://gentileproplaw.com/contact/
0 Comments