Title to Trust or Trustee?

How and where you take title to a property matters — a lot.

When using a trust, you need to know there are 2 main ways to take title: 1) in the name of the Trustee; 2) in the name of the Trust.

Why you’d choose one over the other depends on your situation, wants, etc.


Author: 

Caleb Christopher

(video coming soon)

Taking Title in the Trust or as the Trustee…?

In most states, title can be vested in the Trust itself, but some states require title to be vested with the Trustee:

Best Practice: Title to the Trustee

Since you can do either in all 50 states, the universal choice is to deed the property to the Trustee, such as XYZ LLC as Trustee of the Johnson Family 123 Main St Trust.

It is generally safe to deed the property to the trustee(s) rather than the trust itself when using a land trust structure.The Trustee holding legal title is also consistent with traditional trust principles separating legal and equitable ownership interests.

Is that the best choice? Not always.

Second Choice: Title to the Trust

In most cases, it won’t make a difference for people whether they deed the property to the Trust or Trustee, but in some cases, one may prefer to take title in the name of the Trust itself, because this allows the changing of Trustees without a new deed having to be made.

Example: An investor who intends to sell the property soon and does not want to be the trustee forever… They may want to take title in the name of the Trust so when they sell, they can assign the beneficial interest and trade out who’s the Trustee.

Summary

It’s up to your situation, but unless there’s a reason to deed a property to a Trust instead of the Trustee, the default choice is to go the Trustee route.