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How to Transfer Trust Property 

By July 17, 2025No Comments

Table of Contents

  • Key Takeaways
  • What Does It Mean to Transfer Property Into or Out of a Trust?
  • Steps to Transfer Trust Property in California
  • Common Mistakes and What Can Go Wrong
  • Benefits of Transferring Property Into a Trust
  • Related Resources
  • FAQ
  • How The Grossman Law Firm Can Help

Key Takeaways

  • Transferring property into or out of a trust in California requires proper documentation, adherence to specific legal steps, and compliance with county and state regulations.
  • Real estate must be deeded in or out of the trust and recorded with the county recorder.
  • Successor trustees are responsible for transferring trust property after the grantor’s death.
  • Failing to file required forms can lead to probate or insurance issues.
  • Consult a qualified trust litigation attorney to avoid costly errors and protect your interests.

How to Transfer Trust Property in California

What Does It Mean to Transfer Property Into or Out of a Trust?

Trusts are often used in California to manage assets during life and after death. To be effective, assets, especially real estate, must be formally transferred into the trust. It is called “funding” the trust. After the grantor passes away, the successor trustee is responsible for transferring trust property to the beneficiaries named in the trust.

At The Grossman Law Firm, we work with beneficiaries and trustees throughout California to ensure that trust transfers are handled properly and in accordance with the law. Whether you’re putting property into a trust or receiving it from one, it’s essential to understand your responsibilities and risks.

Steps to Transfer Trust Property in California

Whether transferring property into a trust or out of a decedent’s trust, here are the key steps:

1. Obtain a Copy of the Existing Deed

Before transferring real estate into a trust, confirm the current legal ownership by obtaining the most recent deed. It helps avoid title issues or disputes.

2. Prepare and Record a New Deed

Use a trust transfer deed or a grant deed to change ownership. The deed should list the current owner (grantor) and the new owner (typically the trustee of the trust). The deed must be notarized and recorded with the county recorder where the property is located.

3. File a Preliminary Change of Ownership Report (PCOR)

The form must be submitted with the deed. It alerts the county assessor’s office to the change in ownership. It can help avoid unnecessary property tax reassessment if exemptions apply.

4. Mirror the Legal Description

The legal description from the current deed must be copied exactly into the new deed. Any discrepancy could result in a failed transfer and potentially lead to the property being placed in probate.

5. Handle Mortgages or Liens

If the property has a mortgage, contact the lender before transferring title to the trust. Some lenders may require consent, while others may have restrictions under a due-on-sale clause.

6. Transferring Property Out of a Deceased Parent’s Trust

If you’re the successor trustee of a deceased parent’s trust, you’ll need to distribute the property to the named beneficiaries. It may involve:

  • Filing an affidavit of death of the trustee
  • Preparing a new deed transferring property to the beneficiaries
  • Recording all documents with the county

In some cases, you may sell the property instead of transferring it. Either way, proper legal filings are required.

Common Mistakes and What Can Go Wrong

Failure to follow California’s trust transfer procedures can result in serious issues, such as:

  • Probate Risk: If real estate is not appropriately titled in the trust, it may need to go through probate despite the existence of a trust.
  • Insurance Gaps: If you don’t notify your insurer of the new trust ownership, you could void your coverage or face claims denial.
  • Loan Complications: Transferring property without addressing existing mortgages can trigger default or refinancing problems.
  • Title Defects: Omitting required forms (such as the PCOR) or failing to match the legal description can create title issues that delay or prevent the sale or transfer of property.

To avoid these problems, we strongly recommend consulting a probate or trust attorney familiar with California law.

Benefits of Transferring Property Into a Trust

While the process requires attention to detail, transferring real property into a trust offers significant advantages:

  • Avoiding Probate: Property in a properly funded trust can bypass California’s often lengthy probate process.
  • Faster Distribution: Trustees can distribute trust property more quickly than executors in a probate process.
  • Incapacity Planning: Trusts enable the smooth management of assets in the event the grantor becomes incapacitated.
  • Privacy: Unlike probate, trust administration is generally not a public process.
  • Tax Management: Depending on the type of trust, capital gains and property tax treatment may be more favorable.
  • Asset Protection: Combined with tools like LLCs and trusts, liability protection strategies can be effectively supported.

Related Resources

Want to learn more about trust property and beneficiary rights in California? Start here:

FAQ

Do I need an attorney to transfer property into a trust in California?

Although it’s not legally required, it’s highly recommended. A trust litigation or probate attorney can ensure all documents are correctly prepared and filed.

What happens if a deed is recorded incorrectly?

An incorrect deed can invalidate the transfer, leaving the property outside the trust and subject to probate.

Can I transfer property with a mortgage into a trust?

Yes, but you must notify the lender first. Some loans may require lender approval or trigger a due-on-sale clause.

How do I transfer property to beneficiaries after someone dies?

The successor trustee prepares a new deed transferring the property, files an affidavit of death, and records all necessary paperwork with the county.

How The Grossman Law Firm Can Help

At The Grossman Law Firm, we assist beneficiaries and heirs throughout California in enforcing their rights in probate and trust litigation.

Call (888) 443-6590 or fill out our Get Help Now form. Our Intake Specialists can evaluate your case at no cost to you to assess your situation. Qualifying cases will be scheduled for a Free Phone Consultation with Attorney Scott Grossman.