Putting Rentals In Trust

[Jesse Evans]

Is it difficult to change rental properties to Trust ownership. 

[Scott Smith]

A Land Trust is a type of trust that is created by a trust agreement for the sole purpose of owning a specific piece of property. The trust agreement is a private document and will not be recorded or filed in the public records. There are three parties involved in a land trust: the grantor, trustee and beneficiary. A Warranty Deed is used, as opposed to a Quit Claim Deed, in order for the investor to maintain Title Insurance. Most Title Insurance companies will cease to offer insurance if a Quit Claim Deed is used for the transfer as the Quit Claim Deed offers no warranties as to clean title.

Every county requires a Warranty Deed to be signed by the Grantor (the investor.) The fees to record a Warranty Deed will vary from county to county. Most counties require additional ancillary documents/forms to be sent in with the Warranty Deed in order for a successful recordation. The documents/forms will vary county by county. The required documents/forms can be found on the website maintained by the County Clerk (Registry of Deeds, Recorder of Deeds, Clerk of Court, etc). Examples include: Transfer affidavits, Preliminary Change of Ownership Reports, Transfer Tax affidavits, etc.

This is the general process to create a land trust and transfer a property, but as you can see it varies significantly depending on where the property is. Most places are pretty easy, but if you find yourself in a frustrating county (Chicago is a nightmare every time...) then just buckle in and push through. Or just find a good attorney to tackle the project for you. Either way, just ensure you created all the required documents  and that they are recorded correctly. If you want to get fancy and remove your name from public record to provide more privacy you would need an attorney's assistance, but some investors find it a valuable investment.