Holding real estate in a trust

What it means to ‘hold’ real estate in a trust

When property is held in a revocable living trust, the trust, not the individual, is the legal owner on record, and that requires a new deed transferring the property from the individual's name into the name of the trust. The person who created the trust (the grantor) typically continues to live in and control the property exactly as before, usually serving as trustee, but the property itself is now titled to the trust rather than to them personally.

The main reason people do it: avoiding probate

Property titled in a person's individual name generally has to go through probate before it passes to heirs. Property already titled to a trust doesn't. The trust document itself controls what happens to it, and the successor trustee can transfer or manage it without court involvement. For anyone with real estate in more than one state, this matters even more: avoiding probate in Virginia is one thing, but avoiding a second, separate probate proceeding in another state for out-of-state property is a real, practical benefit.

A deed that's signed but never recorded doesn't count

The most common mistake we see: someone creates a trust, has a deed prepared transferring the home into it, and then the deed never actually gets recorded with the Circuit Court Clerk. An unrecorded deed doesn't move ownership. The property is still titled to the individual, the trust owns nothing, and probate still applies. Funding the trust properly means following through on the recording, not just the signing.

What doesn't change day to day

Homestead treatment, property tax treatment, and the owner's ability to live in, rent out, refinance, or sell the property are generally unaffected by holding it in a revocable trust. The grantor keeps functional control throughout their lifetime. The change is really about what happens automatically at death, not about how the property is used while the grantor is alive.

Whether it makes sense for you

A living trust isn't automatically the right tool for every property owner. For a single Virginia property with a straightforward estate, a will or a transfer on death deed may accomplish the same goal more simply. Watch the full episode above for Brett's explanation of when holding real estate in a trust is actually worth the extra step, and talk to us before deciding which structure fits your situation.