Deed transfers, revocable trusts… explained

Our office receives several inquiries on this topic. Check out our deed transfer FAQ and guide to deed transfers + joint tenants.

Today I will be addressing Deed Transfers and Revocable Trusts.

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(1) Transferring title from a sole owner to a Revocable Trust

We all eventually get to an age where we should be doing at least a little estate planning. One of the popular tools for estate planning is the Revocable Trust. When your estate planning attorney or adviser sets up your revocable trust, she will often advise that you title your property in the name of the trust.

I am often asked how much it will cost to transfer title to a revocable trust in the District of Columbia.

Putting residential property from an individual sole owner into that individual’s revocable trust is exempt from transfer and recordation taxes.^* Costs to title transfer to a revocable trust can be estimated as follows:

(2)  Vice-versa

I have clients that have done their estate planning, transferred all of their property into their revocable trusts only to find that their lender will not allow them to refinance their mortgage loan on a property titled in the name of the Revocable Trust.

(Before you change title, verify that it is a requirement to get the loan and not the lender’s preference. If you are able to leave the title in the name of the trust, you may find you will be required to provide more paperwork/documentation to the lender and guaranty the loan individually.)

If the title is to go from the Revocable Trust into the individual who can revoke the trust and the property is located in DC, the deed is exempt from transfer and recordation taxes.^*  Costs to transfer title from a revocable trust to a sole owner can be estimated as follows:

Please note that the District of Columbia does not require that the trust is revoked in order to move the property title out of the name of the trust.

*This assumes the property is a residential property less than 5 units and not rented. If your property is either 5 units or more and/ or tenanted, you should consult your real estate advisor before changing title.