Taking title to property from Seller directly into a Living Trust

Buying & Selling Real Estate
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Taking title to property from Seller directly into a Living Trust

Dennis Shinn
Member since 2019 · 4 posts · 0 votes

This is a Subject-To property.

I understand taking title to a property from the Seller to myself or my LLC. Thats pretty easy.

What I need help figuring out is...How do you take title from the Seller and place the property directly into a Living Trust without taking title in my own name or my LLC first? In other words...(As the buyer of the property) How do I place a property that I don't own into a trust as if I were the grantor? It seems to me that the Seller is the real grantor and has to be the one to create the trust (which means the Seller would be able to change the trustee and beneficiaries whenever they feel like it). I know that deeding the property over to the trust is simple, but the grantor of the trust has to be the Seller, which gives them too much power over the trust.

Does getting the Seller to sign a Power of Attorney over the property (giving me the power over the property) help to take away the Seller's power over the trust?

Or is the correct way to do it...Take the title of the property from the Seller to my LLC first, then immediately create the trust (because now as the true owner, I can actually be the grantor)? Then deed the property from my LLC into the trust?

Any feedback will be greatly appreciated.

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  • Clint Votruba
    Member since 2019 · 92 posts · 56 votes
    6y

    I am an Illinois real estate attorney and my knowledge is based on Illinois laws and local customs.

    You stated:   "How do you take title from the Seller and place the property directly into a Living Trust without taking title in my own name or my LLC first?"

    First, you would have to create a Revocable Living Trust document and sign it as the Grantor and the Trustee.  I think you should hire an attorney to do this but you would name the Trust "John Smith, Trustee of the John Smith Revocable Living Trust dated November 29, 2019."

    Second, after creating the actual Trust documents, you would ask/have the Seller name the Trust as the Grantee on the Deed,  that transfers title to you, as "John Smith, Trustee of the John Smith Revocable Living Trust dated November 29, 2019."

    Every state has special rules regarding the preparation of revocable trusts and Deeds that transfer title.  You should hire an attorney to complete these documents.

    Finally, know that holding title in a Revocable Trust does not shield that asset from creditors.  Most people believe creditors cannot attached to assets held in a revocable trust but they can.

    Good luck. 

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  • Mike S.
    Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
    6y

    @Dennis Shinn

    Transfer the money to your living trust.

    On the contract do not put yourself as the buyer but you as trustee of your trust.

    On closing, have the trust pay directly.

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