Removing Real Estate From a Revocable Trust

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Revocable trusts are often implemented to avoid probate. A trust's maker, or grantor, retains the power to fully revoke or amend a revocable trust. A trust is governed by its terms and adding or removing real estate from a trust is a power that is usually specifically listed. If a trust lacks this provision, an amendment may be legally required before real estate can be added or removed. Trust requirements may vary, depending on state law.

Trusts and Deeds

Trust real estate is removed from a trust via a property deed. There are several types of property deeds. If a grantor wishes to remove real estate from the trust and re-assume ownership of the property, a quitclaim deed is appropriate. Deeds of this type do not make warranties by the grantor. If trust property is being sold to a third party, a warranty deed is generally used. Warranty deeds ensure that properties are free of title defects.

Read More: How Family Trusts Work

Trustee's Role

A trustee is the party who must convey property out of a revocable trust. The grantor generally acts as the trustee of a revocable trust during his lifetime. He must sign the deed, print or type his name below his signature and state that he is acting on behalf of the trust. Once the deed is signed, it is recorded in the register of deeds in the county where the real estate is located.

Ramifications for Removing Property

Property removed from a trust may be subject to probate when the grantor dies. Probate creates delays for heirs and incurs court costs that do not apply to trusts. Removing property from a trust can also result in intestate succession distribution, which means state law determines heirs to the estate rather than the decedent. A pour-over will can ensure that a decedent's property is conveyed into his revocable trust if it is not included in the trust at the time of death.

Amending Trust Schedules

Trusts generally have an attached asset schedule that lists all of the property in the trust. An asset schedule allows the trustee to easily locate and identify trust assets when the grantor dies. When property is removed from a trust, the trustee should update the asset schedule for convenient reference and accuracy. The new asset schedule should be dated, identify the property removed and be attached to the trust.