Estate planners often recommend Living Trusts as one option for holding title to real property, depending on an individual’s financial and estate planning goals. When a property is held in a Living Trust, title companies may have specific documentation and procedural requirements to complete a transaction. While a title company representative may be able to assist with general questions, legal or tax-related concerns should always be addressed with an attorney or accountant.
A Living Trust, also known as an inter vivos trust, is created during the lifetime of the individuals establishing it, rather than through a will after death. In a typical family trust, the individuals creating the trust, known as the trustors or settlors, often appoint themselves as trustees and remain the primary beneficiaries during their lifetime. After their passing, the trust assets are either distributed to designated beneficiaries, such as children or grandchildren, or managed according to the trust’s terms.
When property is placed in a trust, legal title is held by the trustee on behalf of the trust, not by the trust itself. Depending on the terms of the trust, the trustee may have authority to manage, refinance, or borrow against the property, although lender requirements may vary. Some individuals choose trusts to help avoid probate, potentially reduce or defer certain taxes, and create a structured plan for asset distribution, but the suitability of a trust depends entirely on personal circumstances and professional legal guidance.
It is important to understand that private arrangements where another person holds title “in trust” outside of a properly documented legal trust structure can create serious risks. Since the recorded trustee has legal authority over the property, informal agreements may leave the true owner without adequate protection. For this reason, anyone considering placing property in trust should seek qualified legal advice to ensure the arrangement aligns with their intentions and complies with applicable laws.
