How Do I Transfer Property From Trust to Beneficiary?

Written by phil m. fowler | 13/05/2017

Only the trustee has legal authority to transfer property from a trust to the beneficiary. The method for transferring property to a beneficiary depends on the type of property. More specifically, the method depends on whether the property requires a document of title. Before transferring property, though, the trustee should review the trust document to make sure that the transfer is authorised. The trustee should not transfer property when doing so would violate the terms of the trust.

Trustee

Every trust must name at least one trustee. The trustee is the person who manages the trust and the trust property. Some trusts, however, name co-trustees. If your trust names co-trustees, you will need to review the trust document itself to determine whether one co-trustee may transfer trust property without the other co-trustee, or whether both co-trustee's must agree to the property transfer. The trustee, or co-trustee, has a legal duty to care for the trust property according to the terms of the trust. This means the trustee must obey the trust terms and only transfer property when the trust authorises it.

No Document of Title

Most personal property can be transferred without a document of title. For example, household furnishings, family jewellery, electronics and farm equipment do not require documents of title. The safest and best way to transfer this type of property to a beneficiary is to first remove the property from the trust schedule--a list attached to the trust document that identifies all of the trust property--and then to sign a simple assignment of property. The trustee will sign the assignment of property and name the beneficiary as the new owner of the property.

Documents of Title

Other types of property require documents of title, including real estate, cars, boats, ATVs and certain types of financial accounts. This type of property can be transferred by a deed or a bill of sale, depending on your state's specific laws. Real estate should be transferred by deed, and the deed should be recorded in the county recorder's office. Cars and other types of personal property typically are transferred by a bill of sale.

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