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What legal procedures/paperwork do I need to do to transfer paid off home from the living trust account to 2 of the 4 siblings?

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Due to the death of Mom and Dad, the house is in trust account. Two of the siblings will buy out the other 2. What expense is incurred to transfer living trust deed to the other 2 siblings. What process is required, what forms needs to be filed out, etc. regarding the transfer, property taxes, homeowners & fire insurance, etc and the cost involved?

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Posted

Normally, there would be a deed from the trust. There might be two deeds in your case, one from the trust to all of the beneficiaries, and then a deed from the two selling beneficiaries to the other two, in exchange for a payment. You would also have property tax forms to complete. The insurance would be transferred to the incoming owners. If this were in Michigan, it would probably cost you $300-400 to get the paperwork in place. Your mileage may vary by you, but this is definitely something to be handled through an attorney.

James Frederick

***Please be sure to mark if you find the answer "helpful" or a "best" answer. Thank you! I hope this helps. ***************************************** LEGAL DISCLAIMER I am licensed to practice law in the State of Michigan and have offices in Wayne and Ingham Counties. My practice is focused in the areas of estate planning and probate administration. I am ethically required to state that the above answer does not create an attorney/client relationship. These responses should be considered general legal education and are intended to provide general information about the question asked. Frequently, the question does not include important facts that, if known, could significantly change the answer. Information provided on this site should not be used as a substitute for competent legal advice from a licensed attorney that practices in your state. The law changes frequently and varies from state to state. If I refer to your state's laws, you should not rely on what I say; I just did a quick Internet search and found something that looked relevant that I hoped you would find helpful. You should verify and confirm any information provided with an attorney licensed in your state. I hope you our answer helpful!

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Assuming the property is located in California, the two siblings who want to buy out the other two siblings should arrange that buy-out before the house is transferred out of Trust by trust transfer deed to the two siblings who want to continue to own the property. Then the transfer would be eligible for the Parent-Child exclusion, which will avoid reassessment of the property and imposition of transfer taxes. The buy-out could be in the form of an unequal distribution of the trust estate, a promissory note, or a trustee loan, provided the trust has the proper provisions. If the house is transferred from the trust to all four siblings and two selling siblings subsequently sell their interests to the two remaining siblings, 50% of the property will be reassessed, and a transfer tax will be assessed against each transfer. Consult with a knowledgeable attorney about the structure of this transaction.

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It is very important that you consult legal counsel. Your attorney will prepare a deed along with a preliminary change of ownership report and a claim to exclude the property from being reassessed. As mentioned above, it is critical that the transaction be structured properly to avoid having the property reassessed for property tax purposes.

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