I am often asked questions by homeowners (especially investors) like, “How can I put a property into a Trust?” and, “Does having a property in a Trust protect me from a suit or extra taxes?”
The first thing to note is that in Georgia, a Trust in and of itself, is not a legal entity. I have found many Do-It-Yourself deeds where an individual grants title by Deed to, “XYZ Trust.” Unfortunately, this is improper since a deed must transfer title to an individual or an entity. The title must be transferred to and held by a Trustee in Georgia. When the time comes for the protection provided by a Trust, an improper transfer will be set aside. Read as, “No protection here."
When properly transferred, a Trust can provide a number of benefits to a property owner, including protection of the asset from a search under your name if the Trust is titled in a manner where it does not include your name, and protection of other assets in a suit related to an accident or injury on that property, and transfer of ownership in the property without requiring recorded deed, and tax benefits by avoiding potential gift taxes upon the death of one or more owners.
Setting up a Trust can be a simple and inexpensive process. I always refer people interested in holding title this way to their accountants to confirm the benefit to them before transferring property to a Trust. It is important that a property owner speak with an expert that knows his or her specific fiscal situation before doing so.
As always, at Ganek, PC we have trained and helpful attorneys and staff to assist you with questions on this or any other topic related to real property purchases in Georgia.