How do I Transfer Property into a Trust?
When drafting trusts, many chose to transfer their real estate property into the trust. Transferring property into a trust usually safeguards it from probate after the owner’s passing and sometimes can provide tax benefits. In order to transfer a real estate property into a trust, a deed needs to be prepared that states that the property is now owned by the trust. This deed needs to contain:
- The name of the owner of the property.
- The name of the new owner of the property. This would be the name of the trust.
- The legal description of the property. This description can usually be found on the previous deed of the property, as the descriptions rarely change.
The notarized signed deed then needs to be recorded with the local county’s office.
Do I Have to Notify the HOA when I Transfer Property into a Trust?
It depends. Typically, there is no legal requirement to notify an HOA of changes in ownership of a property. However, it is highly advisable to do so, as notifying the Association can help the previous owners avoid later incurred costs by the HOA. Some HOAs have rules that require owners to notify the Association before selling the property, as the HOA may play an active and mandatory role in the sale process. An example of this could be a rule that states that the Association has the right to collect all outstanding fees from the previous property owner before the property can be passed on to someone else.
Also, some HOAs charge fees for paperwork that they draft for new owners of the property. It is the previous owner’s obligation to compensate the HOA for any such fees it may incur that stem from the transfer of interest. In those cases when the HOA has bylaws that require the owner to notify the Association in case of a change of ownership, a large fine could be incurred for failure to do so. In order to assess each individual case of a transfer of interest, it is important to consult with an estate planning or a real estate attorney.