Utah Real Estate Code 57-1-20: Transfers in Trust of Real Property–Purposes–Effect
All right, title, interest and claim in and to the trust property acquired by the trustor, or the trustor’s successors in interest, subsequent to the execution of the trust deed, shall inure to the trustee as security for the obligation or obligations for which the trust property is conveyed as if acquired before execution of the trust deed. Transfers in trust of real property may be made to secure the performance of an obligation of the trustor or any other person named in the trust deed to a beneficiary.
Preparing the Deed
First, get a deed form. Try to find one that is specific to your state. You should be able to find one online. Or you may be able to get one at a local law library; look for books on “real property” that have deed forms you can photocopy. You can use a “quitclaim” or “grant” deed form. Deed forms vary somewhat, but they all require the same basic information.
• The current owners’ names: If you are the sole owner, or if you and someone else co-own the property and you are transferring just your share, only your name goes here. If you and your spouse own the property together and are transferring it to a shared trust, type in both of your names. Use exactly the same form of your name as is used on the deed that transferred the property to you and you used in your living trust document.
• The new owner’s name: Fill in your name(s), as trustee(s) exactly as it appears in the first paragraph of your trust document, and the date you signed the trust document in front of a notary public.
• The “legal description” of the property: Copy the description exactly as it appears on the previous deed. If you co-own the property with someone and are transferring only your share, you must also state, with the legal description, that you are transferring only that share (a one-half interest, for example) or that you are transferring “all your interest” in the property. After everything is filled in, sign and date the deed in front of a notary public for the state in which the property is located. Everyone you listed as a current owner, who is transferring his or her interest in the property to the trustee, must sign the deed.
Recording the Deed
After the deed is signed, you need to “record” it that is, put a copy of the notarized deed on file in the county office that keeps local property records. In most places, the land records office is called the county recorder’s office, land registry office or county clerk’s office. Just take the original, signed deed to the land records office. For a small fee, a clerk will make a copy and put it in the public records. You’ll get your original back, stamped with a reference number to show where the copy can be found in the public records.
Changing Ownership to the Trust
When you transfer assets to a living trust you are changing legal ownership of your assets from your name to that of the trust. Most people create a living trust with themselves as trustee, so you will still be able to use and control your assets, but they will technically be owned by the trust. When funding a living trust, ownership will be transferred from you to (Your Name), Trustee of the (Your Name) Living Trust. Note that items in the trust will continue to be assigned to your Social Security number. To get started, you’ll want to make a complete list of the assets you want to transfer so that you are sure you don’t leave anything out.
Transferring Real Property to Your Trust
One of the largest assets most people own is their home and this is likely an asset you want to transfer into your trust. You can transfer your home (or any real property) to the trust with a deed, a document that transfers ownership to the trust. A quitclaim deed is the most common and simplest method (and one you can do yourself). Alternatively, a warranty deed ensures you have good title when you transfer it and may make it easier for your trust beneficiaries to sell the home down the line. You will want to check with an attorney about which type of deed is best in your situation. Some states require that all deeds be prepared by attorneys so you may not have a self-help option. Once the deed form is prepared, a real estate deed must be filed with your county and you will need to pay a filing fee. A deed transfer should not affect your mortgage, even if you have a due on sale provision. You should check on your title insurance (if you have any) though. You may be able to simply transfer it to the trust, or your title insurance company may require that the trust buy a new policy. Once the deed is transferred, you may need to change your homeowner’s insurance to indicate the trust as owner of the property. If you receive a real estate tax exemption, you will want to make sure that is properly applied by showing documentation of the trust to the taxing authority, such as a certificate of trust (a document your attorney can create that certifies the existence of the trust).
Can a Quit Claim Deed Transfer Property to a Trust?
A quitclaim is commonly used to transfer personal ownership of real estate into a trust. Without putting the property in the trust, it remains subject to probate timelines and fees. While a quitclaim deed is commonly used, it isn’t the only deed that places the property into the trust.
Funding the Trust with a Quitclaim Deed
Funding a trust means assets are properly titled so the trust, not the trustees or original owners, own the asset. Quitclaim deeds can fund the trust with real estate. A quitclaim deed relinquishes all rights to the property without warranty. The person signing the deed gives the property to the new person or entity named on the deed, in this case the trust. To properly fund the trust, you must first have the valid trust established. It must identify the property by legal description and address. This information corresponds with the information needed on the quitclaim deed. Complete the quitclaim deed with all pertinent information including the grantor’s legal name and title, the new owner’s name and title, and the property description. The grantor gives the property. The grantee gets the property. In this case, the grantee is the trust. Quitclaim deeds must be notarized and filed with the county recorder or assessor’s office.
Potential Problems with Quitclaim Deeds
While a quitclaim deed is common and easy to do, it has some limits to guaranteeing the chain of title. In the case of individuals funding a trust, this isn’t usually an issue, but it can become problematic down the road if the property is sold. A better option is the warranty deed, which provides assurances of a clean title. If and when beneficiaries choose to sell, the warranty deed includes a title search; therefore it takes more time and involves other expenses. Otherwise, the recording process is the same as a quitclaim deed.
Reasons to Start a Trust
While trust funds, or trusts, may seem the province of the wealthy, there are actually many benefits to creating them, even if you’re not a multimillionaire. Trusts can help you manage your property and assets, make sure they are distributed after your death according to your wishes, and save your family money, time and paperwork. Simply put, a trust is legal document established by an individual or corporation known as a grantor. The trust holds property or assets for a specific person or group, called the beneficiary. Control of the trust is maintained by a trustee in some cases the grantor is the trustee, and in others the grantor names a trusted family member, friend or professional. There are many reasons to set up a trust, including avoiding probate, providing for your family after your death, and stating exactly how, and when, your descendants receive their inheritance. But not everyone should establish a trust for some; a standard will is a better choice. Although do-it-yourself kits are available, the applicable laws are complicated, and anyone considering a trust should consult a lawyer. But before calling your attorney, read on to learn a bit more about the advantages of a trust.
• Trusts Are Private: Trusts offer greater privacy than wills because trusts don’t go through probate, so there usually aren’t any public records of them. This means your assets and whom you leave them to are kept private. In a few rare cases, there will be a public record, such as if a trust is funded from a pour over provision in a will this is when items are transferred from a probate estate into your trust. Also, in some states, you may have to register a trust if it contains such items as real estate and securities, and this will create a public record. However, there may be a way around these obstacles. By placing assets in the name of a partnership instead of a trustee (called nominee partnership) you can protect your privacy. In this case, the assets in the trust are controlled by the partnership, but are still owned by the grantor.
• Help Managing Your Affairs: Trusts can help you manage your affairs if you become unable to do so. Many people set up trusts to prepare for the possibility that they may become disabled or ill before their death, and thus unable to manage their assets properly. To obtain this protection, you need to set up a revocable living trust and name a trustee who will manage it. The trustee can take over managing, not only your affairs, but also those of any beneficiaries you’ve been providing for. Having a living trust and choosing your own trustee avoids a situation where the courts must appoint someone to manage your assets for you. In addition to taking away control of your affairs, a court-appointed guardianship can involve extensive paperwork, delays and other complications.
• Eliminate Family Feuds: Trusts can minimize possible conflict between heirs when an estate is being settled. They are highly customizable, allowing grantors to tailor the document to the needs of their own situations. A grantor can detail the exact items and monetary amounts to be left to each beneficiary. This is particularly helpful when dividing items that heirs may argue over, or items that may have sentimental value. A grantor can decide to leave, for example, a painting to a child who particularly appreciated it, an item of furniture to a relative who is a collector and a car to a grandchild who admired it. With all of the specifics spelled out, heirs have little reason to argue over “who gets what.” Trusts offer more control than wills in complex family situations, such as when leaving assets to a married beneficiary. Unlike a will, a trust can be customized so that a beneficiary’s spouse cannot gain access to the inheritance without the beneficiary’s consent.
• Dividing Assets and Property: Having what’s known as a living trust can help determine how difficult-to-divide assets should be split up. In the case of real estate, for example, a living trust can be highly advantageous. With a house, a living trust offers more control than a will in spelling out how such property should be transferred after the grantor’s death. A living trust can detail who inherits the property, as well as who has the right to use it and under what conditions; whether the property can be sold, and if so, how the proceeds should be distributed; and how the inheritors of the house can buy each other out if they choose to do so. This way a grantor can ensure that each beneficiary receives equal access to the property. Other assets that could be placed in a trust might a boat or a car that are intended to be used by all of the beneficiaries, or any other property that the grantor might want them to share.
• Reduce Estate Taxes: An estate tax is a tax on your right to transfer property after your death. A trust can provide a way to avoid or reduce estate taxes because assets and property placed into a trust are not subject to these taxes. For example, with a children’s trust, a grantor can make tax-free monetary gifts from an estate to children or grandchildren. By making these gifts, the donor is reducing the overall taxable amount of the estate, and thus lowering tax liability.
• Charitable Trusts: A charitable trust is a popular way to donate to charitable organizations. A grantor can transfer assets such as money, real estate or art to a charitable trust, and designate that they eventually be given to a specific organization. In the meantime, however, the grantor can continue to use the property. If the assets in the trust are, for example, a summer home or a favorite painting, they can be enjoyed just as much after being put in a trust as they were before and possibly more, because the grantor knows that the property will ultimately go to support a worthy cause. And what’s more, these kinds of charitable donations are often tax-deductible.
• Higher Education: Another common reason trusts are established is to pay for education. Whether the grantor is paying for one child or several, a college trust fund offers flexibility in how and when money is disbursed for educational expenses. Typically, an education trust will specify that each child’s full tuition and college expenses be paid, after which any remaining assets in the trust can be split evenly among all of the children. In some cases, the children will have different financial needs — for example, if one child attends medical school, while another simply earns a bachelors degree. The person setting up the trust may decide to give each child the same amount, regardless of the cost of their education, or provide varying amounts depending on each child’s educational costs.
• Flexible Distribution: Trusts offer flexibility in how assets are distributed. The grantor of a trust can set out in detail how his or her estate is to be distributed to beneficiaries. For beneficiaries who are unable to effectively manage money or who can’t be relied on to make sound financial decisions, a trust gives the grantor the option of disbursing funds to the beneficiary in smaller, regular amounts instead of one large lump sum, so the beneficiary can’t spend all the money at once. The grantor can also specify how the funds can be spent, for example on rent, food, healthcare, and other necessary or unexpected expenses.
• Contest-resistant: A trust gives you greater protection than a will against legal action from anyone who is unhappy with the distribution of assets and decides to challenge it. This benefit alone may make some people consider a trust a good option. However, the fact that a trust is difficult to contest doesn’t mean it is impossible. There are two main ways to challenge the legitimacy of a trust. The complainant can claim that the grantor was mentally incapacitated when setting up the trust essentially, that the grantor didn’t have the ability to fully understand the responsibilities, risks, benefits and other aspects of setting up the trust. And a trust can also be contested on the grounds that the grantor was under duress or “undue influence” when setting up the trust and didn’t do so freely. But a trust is still more difficult to contest that a will.
• Avoid Probate: Often cited as a key reason for establishing a trust, avoiding probate can mean substantial savings in time, legal fees and paperwork. If your assets and property are to be distributed according to your will, probate is the process by which a judge determines the will’s validity. A trust allows your descendants to bypass this process and gain access to the assets and property more quickly. Plus, your family can avoid probate fees, which can be as much as 5% of the value your estate. The probate process is also a long one, and can take up to a year or even two to finalize, during which time your family can’t touch their inheritance. In some states, however, the courts allow beneficiaries a certain amount of money for living expenses while they wait for their inheritance to become available.
Terms Used In Utah Code 57-1-20
• Beneficiary: A person who is entitled to receive the benefits or proceeds of a will, trust, insurance policy, retirement plan, annuity, or other contract.
• Deed: The legal instrument used to transfer title in real property from one person to another.
• Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
• Property: includes both real and personal property.
• Trustee: A person or institution holding and administering property in trust.
• Trustor: The person who makes or creates a trust also known as the grantor or settlor.
Real Estate Attorney
When you need a Real Estate Lawyer, please call Ascent Law LLC for your free consultation (801) 676-5506. We want to help you.
8833 S. Redwood Road, Suite C
West Jordan, Utah
84088 United States
Telephone: (801) 676-5506
Recent Posts
{
“@context”: “http://schema.org/”,
“@type”: “Product”,
“name”: “ascentlawfirm”,
“description”: “Ascent Law helps you in divorce, bankruptcy, probate, business or criminal cases in Utah, call 801-676-5506 for a free consultation today. We want to help you.
“,
“brand”: {
“@type”: “Thing”,
“name”: “ascentlawfirm”
},
“aggregateRating”: {
“@type”: “AggregateRating”,
“ratingValue”: “4.9”,
“ratingCount”: “118”
},
“offers”: {
“@type”: “Offer”,
“priceCurrency”: “USD”
}
}
The post Utah Real Estate Code 57-1-20 first appeared on Michael Anderson.
from Michael Anderson https://www.ascentlawfirm.com/utah-real-estate-code-57-1-20/
from
https://grum193.wordpress.com/2020/09/26/utah-real-estate-code-57-1-20/
No comments:
Post a Comment