Avoid Probate of CA Real Property with Living Trust

Avoid Probate of CA Real Property with Living Trust

In California a revocable living trust is the best way for real property owners to avoid the need to probate their real property, allowing them to maintain control and save money all at the same time.  However, it is not enough to establish a trust – you must also fund it. Transfer of your real property into your trust is not complete without a recorded deed.

To avoid probate a trust must be properly funded. Funding of real property is accomplished by deed. A deed is signed by the owner of the real property that transfers ownership to his or her trust. Deeds are either “warranty deeds” “grant deeds” or “quit claim deeds.” Grant deeds and warranty deeds by operation of law state the owner promises he or she has not conveyed the property to someone else and that their real property does not have any outstanding taxes or debts secured by the property. A quit claim deed conveys ownership “as is.” The deed is “recorded” in the county where the real property is located. This puts the world on notice that title is held by the trust.

A deed transferring real property into your trust transfers “ownership” from you, as an individual, to you, as trustee of your trust. Ownership of real property by trust allows for the transfer of your property when you pass away while avoiding probate.

There is no property tax increase when you transfer your real property into your trust by deed. Each county assessor’s office in California reviews all recorded deeds for that county to determine which properties allow reappraisal of taxes. Transfers in and out of a trust are excluded from reappraisal or increase in property tax. To obtain the exclusion, the grantee fills out a form for the county assessor entitled “Preliminary Change of Ownership Report” (PCOR) and this form is filed with the deed transferring property into your trust. And lastly, there is no transfer tax on trust transfer deeds. California Revenue and Taxation Code exempts trust transfer deeds from transfer tax. To obtain this exemption, the tax code must be stated on the deed.

For assistance with transferring your California real property into your revocable living trust, please contact the Law Offices of Eric A. Rudolph.  We have years of experience helping individuals and couples protect their real property, maintain control and save money.

2016-11-05T19:46:21+00:00 November 17th, 2013|Blog, Estate Planning, Real Estate|