Many people choose to establish a revocable trust to hold their valuable assets safely and to facilitate ease of distribution to heirs at the time of death. Once a trust is established, ownership of assets and money can be moved into it. To quitclaim to a revocable trust means to sign a quitclaim deed transferring the ownership of real property to the trust.
Quitclaim deeds are commonly used to transfer the ownership of property between two parties. Quitclaim deeds do not offer a guarantee to the grantee that the grantor holds the property free and clear of any type of lien on the title, unlike warranty deeds. Because of this, quitclaims are most often used for transfers among family members, such as from spouse to spouse or from parent to child. The deed lists the names of the grantors and grantees. It also includes a complete legal description of the property. The grantor signs the deed in the presence of a notary public, and then the deed should be recorded with the county land records system.
Trusts are a legal arrangement in which assets are held. Establishing a trust is a personal choice, but trusts are commonly used as a method of estate planning. Upon your death, your heirs normally will be taxed on your assets; this is known as the estate tax. Assets distributed from a trust are not subject to the estate tax. There are two main types of trust: revocable and irrevocable.
Revocable trusts are also known as living trusts. When a trust is created, there are three parties involved: the settlor, the trustee and the beneficiaries. The settlor is the creator of the trust, and the person who owns the items in the trust. The trustee is an individual appointed to oversee the trust and to distribute the assets as instructed upon the settlor's death. The beneficiaries are those named who will receive the assets or money from the trust. When a revocable trust is used, the settlor can also act as the trustee, as long as a successor trustee is named. Revocable trusts can be modified at any time. Property in the trust can be transferred into and out of the trust at the settlor's discretion.
On a quitclaim deed, you will be listed as the grantor and your revocable trust will be the grantee. For example, Citizen X establishes the Citizen X Trust. If he wants to transfer his home into the trust, the quitclaim deed would state that Citizen X transfers his ownership of said property to the Citizen X Trust. The deed will need to be recorded with the county clerk or register of deeds. There will be a recording fee assessed, and possibly transfer taxes. Not every state imposes transfer taxes, and those that do might offer an exemption for transfers into trusts.
- Oregon State Bar: What is a Trust?
- The Letric Law Library: What is a Trust?
- Standard Legal: Should I Use a Quitclaim or Warranty Deed to Transfer Property from a Trust to an Individual?
- New Hampshire Department of Revenue Administration: What is the Real Estate Transfer Tax?
- Bankrate: Understanding Quitclaim Deed, Warranty Deed on Property
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