How to Put a House in a Trust: The Deed, Recording and Mortgage Rules

Not by law in every state, but the stakes are high enough that bar associations advise it. The Florida Bar says plainly: "If your trust will own real estate then it is important to have the deed prepared by an attorney." It explains why: "The attorney will consider the impact of existing mortgages, title issues and homestead restrictions when the deed is prepared."

A deed to a trust is a conveyance like any other. The wording has to name the trustee correctly, describe the land correctly and, in some states, include powers language so a later buyer can rely on the trustee's authority. A mistake can leave title in the wrong name or leave a gap that a title insurer will not close.

The Texas State Law Library gives the same warning about any deed change: there are no one-size-fits-all forms, and changing the language in a deed can have serious legal implications (Texas State Law Library).

Yes, and federal law makes it safer for ordinary homes. A mortgage often contains a due-on-sale clause that lets the lender demand the balance when the property is transferred. For a loan on residential property with fewer than five dwelling units, the statute says a lender may not exercise that option on "a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property" (12 U.S. Code 1701j-3).

That covers the common living trust where the owner is the beneficiary and keeps living in the house. It is narrower than it sounds, so the trust must have the borrower as a beneficiary, and a transfer that also changes who occupies the property is outside the protection. Check the details with the servicer and a lawyer before recording.

The deed does not remove the mortgage. The loan stays in place, the lien stays on the property and the owner stays responsible for the payments.

It depends on the state and the county. The Florida Bar says: "In some situations your homestead property can be transferred to your trust. Most Florida counties have special requirements to maintain the homestead tax exemption and special language may be required in the trust agreement and the deed." It also cautions that "homestead property may lose its exemption from creditors when title is held in a revocable trust-the bankruptcy law on this point is unsettled."

The lesson applies beyond Florida. A homestead exemption for property tax or creditor protection can depend on who holds title and on special wording. Check with the county assessor and a lawyer before deeding a homesteaded house to a trust. See homestead exemption for how the rule works in general.

As a recorded deed in which the grantee is the trustee, usually written as the person's name as trustee of a named trust with a date. In the chain of title, the grantor is the owner and the grantee is the same person in a different capacity, so a name search on the owner alone can miss later documents that were signed by the trustee.

That matters for every later step. A sale, a mortgage or a lien search has to use the trustee's name and the trust's name as well as the person's name. A buyer's title company may ask for proof of the trustee's authority, such as a certified summary of the trust, because the trust document itself is private.

A deed into a trust is also usually a transfer for no price, so it appears with a token amount or none. See how to add someone to a deed for how token-price transfers look in the public record. A searcher who sees the owner deed to a trust should follow the property forward under the trustee's name.

HeritageDeed reports the deeds, mortgages and liens recorded on a property in the counties on the title search coverage page. A report costs $49. A report shows the current owner of record, so you can see whether a deed to a trustee was ever recorded, and lists the open mortgages and liens that the transfer would leave in place. It is not title insurance and not legal advice.