Putting Your House Into a Trust: Steps and Costs

By: James A. Long / Estate Planning , Irrevocable Trusts , Living Trusts , Trusts

I’ve been practicing as an estate planning lawyer in California for over 10-years and if there is any advice I most consistently give it is this: if you own real property you need to put it into a living trust. So, you may be wondering how much does it cost to put your house into a trust.

Here’s the simple answer:

It costs approximately $30 to put your house into a trust. But before you can do that, you first need a living trust, and a new deed changing ownership from you individually, to you as trustee of your trust. Once you have both of those things you can record the deed, which officially transfers ownership of your house from you to your trust. The recording fees can vary depending on how many pages are getting recorded, and whether the house is your primary residence or not.

If the house is your primary residence, then you can expect between $30 and $50 to record the new deed to your house. If your house is a second home, vacation home, or rental property, then you can expect anywhere from $100 to $225 to record the new deed.

As you can see there are a lot of steps and costs involved in getting your house into a living trust. This guide will provide you some basic information about each step.

Why You Should Put Your House Into a Living Trust

Although I cover this topic in more detail in other articles, the main reason to put your house into a living trust is to avoid probate. On average your children will pay approximately $22,000 to inherit a single piece of real property in California. This is because if you die without a living trust your estate needs to go through a process called “probate.”

“Probate” is a court process to determine where your assets should go when you die. The Probate Court charges mandatory “statutory” fees for the attorney and personal representative (the executor or administrator) which a calculated on a percentage of the value of your estate at the time of your death. Since real estate in California is so expensive, you can imagine that the probate fees can add up quickly. An average family with only a single-family home can expect to pay around $22,000 in attorney and executor probate fees.

But if your house is in some kind of trust (either a revocable living trust or an irrevocable trust) then it will not need to go through the probate process so long as a new deed is recorded showing that ownership of the house belongs to the trust. This is why it is so important to be sure that you put any real estate you own into your living trust.

One of the more common mistakes people make during the estate planning process is thinking that just because they have a trust, they will avoid probate. Not so. Unless a trust is funded, it is not more than a fancy will. You fund your trust by putting assets into it. Ownership is real estate is determined by a deed, which is a document describing who owns the property. Thus, unless you have both a trust AND a new deed to transfer ownership your estate plan will likely fail.

Another reason to put your home into a trust is to avoid federal estate tax. A revocable trust and an irrevocable trust can help you avoid federal estate tax if they are drafted correctly and the trust assets are funded to the trust(s) properly. So, if you need a trust for tax reasons, DO NOT rely on LegalZoom, hire an experienced lawyer!

Where to Get a Living Trust?

You can obtain a living trust document from almost anywhere but as you will see, you are best advised to go to an experienced estate planning attorney.

A revocable living trust is not all that hard to draft. Services like Nolo, LegalZoom, and Rocket Lawyer all have good services that provide you with a set of documents that can be used as a living trust. Costs for these kinds of trusts can range from $90 (on sale at Costco) to $350. But don’t be fooled. Obtaining a set of documents from a document provider, like Nolo or LegalZoom, is not the same as engaging in estate planning.

True estate planning not only provides you with the documents you need, but also crafts those documents in a way that is best suited to avoid probate, family disputes, and hidden expenses which can eat away at your estate after you pass. In fact, LegalZoom’s terms of service expressly says that it is not a replacement for legal advice.

Your best bet to obtain a revocable trust or an irrevocable trust is to go to an experienced estate planning or living trust lawyer.

But buyer beware. The State of California allows any attorney to practice in any area of law. This means that you have a lot of generalists attorneys out there who “dabble” in estate planning. They offer cheap estate plans because (in their eyes) all they are providing is a set of documents. But a real estate planning office does so much more.

At Regnum Legacy for example, we offer free first amendments to our clients. We have an ongoing relationship with each of our clients and meet every three years to make sure the estate plan is still in place and working as best as possible. We update our clients on new developments in the law so that they can take advantage of laws as they change. And we offer unlimited legal advice to all of our clients about their particular plan at no extra cost.

Why do we do this? After ten years practicing as an estate planning lawyer, I have witnessed the hard truth and devastation a bad estate plan (or an outdated plan) can cause a family. I never want any of my clients or their children to go through that, so I do everything I can to make sure what they have is going to work when their family needs it most.

If that is not the type of service and experience your estate planning lawyer is offering, consider a different lawyer.

The cost of a living trust with an attorney depends on the type of trust you want/need. A revocable trust will be far cheaper to draft, whereas an irrevocable trust can be a little more expensive because of the complex nature of irrevocable trusts. But on average, costs can range from $900 on the low end to $5,000 on the high end. At Regnum Legacy our client’s average cost for an estate plan is approximately $2,300.

Where Can You Get a New Deed?

If you have done to a reputable estate planning lawyer, he or she will provide you with new deeds to any real property you own (sometimes at an extra cost and sometimes it is included). At Regnum Legacy we always include the deed for your primary residence but charge $250 for each additional deed.

If you went the cheaper route you may need to hire a lawyer to help you. The deed form itself is easy to find. A simple “Google” search for “Quitclaim Deed” will net you a PDF document you can fill out by yourself. But the real work and skill comes in knowing exactly how to change title. Here are the four pieces of information you need to properly fill out a new deed:

  1. The names of the owner or owners of the home exactly as it appears on the current deed.
  2. The APN or Assessor Parcel Number for the home.
  3. The legal name of your trust.
  4. The exact legal description of the home.

Items 1, 2 and 4 can all be found by obtaining the most current deed recorded on title. You can get this from the County Recorder for the County in which the home is located.

The legal name of your trust is a little more complicated but when you understand the formula it is actually pretty simple.

The legal name of any trust is “[acting trustee’s name] as trustee of the [Trust Name] dated [Trust Date].”

First you need the trustee’s name, that is usually you if you created the trust and named yourself as trustee. If you are a successor trustee, you may not be able to record a new deed unless the settlor or settlors (the trust creator or grantor and owner of the property) is/are still alive and have capacity to sign a new deed.

Next, you need the full name of the trust and its date. For example, if I created the trust on September 24, 2021, named the “Long Family Trust,” and I was the trustee, the full legal name of the trust would be: “James A. Long, as Trustee of the Long Family Trust, dated September 24, 2021.”

If you are working with the PDF version of a California Quitclaim Deed all you need is the above 4 pieces of information (you can ignore the parts about escrow and loan information). Once the deed is filled out, you will need to get it notarized which can cost as much as $15 per signature.

Recording Your New Deed

Once the new deed is signed and notarized, you need to record the deed at the County Recorder’s Office for the County in which the property is located. Every County in California requires a document called a “Preliminary Change of Ownership Report” or “PCOR” (pronounced “Pee-Core”). The PCOR tells the County what type of change in ownership is occurring so that they know whether a property tax reassessment needs to be done.

You can find the proper PCOR document by typing “[Name of County] PCOR” into Google.

Once you fill out the PCOR take it and the signed and notarized deed to the recorder’s office. If the property being transferred is your primary residence, then you may need to fill out an Affidavit of Ownership stating that it is your primary residence, otherwise the County may charge you an extra fee. If the property is not your primary residence, then the County will charge you an extra fee (which is required by law).

The County Recorder charges a base fee plus additional fees per page being recorded. In my experience it typically costs between $30 and $50 to record a new deed for a primary residence, and between $100 and $225 to record a deed for a non-primary residence.

Once you deed is recorded, the property is officially (and legally) inside of the trust.

This means that the property will not need to go through the probate process.

 


Regnum Legacy focuses its practice on protecting the people you care about. Led by James Long a trust and business lawyer with over a decade of experience, Regnum Legacy provides quality representation at affordable and flexible rates. We help protect your children and other loved ones through comprehensive estate planning, business planning, contract drafting, and (if necessary) aggressive litigation or dispute resolution. Our clients are not just numbers on a page but extended members of our own family. Feel free to call of to set up a free consultation (951) 228-9979, or email rachel@regnumlegacy.com, and see how you can become part of our Regnum Legacy Family!


Disclaimer: Nothing in this post is intended to be legal advice to you or for a particular situation. Nothing in this post creates any kind of lawyer-client relationship. All legal cases are different and typically hinge on a complex set of varied factors. Therefore, if you think that your legal rights have been violated or that you need an attorney, please do not rely solely on this post for your legal advice. Consult with a lawyer immediately, or call Regnum Legacy at (951) 228-9979 to see if we can represent you.

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