To put jointly owned property into a trust, every co-owner listed on the current deed signs a trust agreement creating the trust, then signs and records a new deed transferring title from the individuals to the trust itself. The trust document sets the rules; the recorded deed is what actually moves the property. Along the way, you need to handle the mortgage, update your insurance, and understand which trust type fits your goals, because those choices carry the tax and legal consequences.
Who Has to Sign Depends on How You Hold Title
The form of co-ownership on your existing deed decides who must participate in the transfer.
- Joint tenancy with right of survivorship (JTWROS). Owners hold equal shares, and a deceased owner’s share passes automatically to the survivors. No single owner can peel off their interest without breaking the joint tenancy, so all joint tenants must agree to move the property into a trust.
- Tenancy in common (TIC). Owners can hold unequal shares, and each share passes through that owner’s own estate plan. A tenant in common can transfer their individual share into a trust without the other owners’ consent, but only that share moves.
- Tenancy by the entirety. Available to married couples in states that recognize it. It works like joint tenancy with survivorship and adds protection from one spouse’s individual creditors. Both spouses must consent to a transfer.
If you hold as JTWROS or tenants by the entirety, trying to move only your share severs the joint tenancy and converts it into a tenancy in common. That wipes out the survivorship feature most co-owners specifically want, so the practical rule is simple: everyone on the deed signs.
Revocable or Irrevocable: Pick Before You Draft
A revocable living trust is the usual choice. You keep full control during your lifetime, can change the terms whenever you want, and can dissolve the trust entirely. The IRS treats a revocable trust as if it doesn’t exist while you’re alive, so income from trust property goes on your personal return with no separate trust filing.1Internal Revenue Service. Abusive Trust Tax Evasion Schemes – Questions and Answers
An irrevocable trust is a different arrangement. Once you transfer property in, you generally can’t take it back, change the terms, or dissolve the trust. In exchange, assets in the trust may be shielded from creditors and removed from your taxable estate. Because you’re giving up ownership, the transfer counts as a gift for federal tax purposes, which may require filing a gift tax return and using part of your lifetime gift and estate tax exemption. Most people considering an irrevocable trust work with an estate planning attorney before signing anything.
Drafting the Trust Agreement
The trust agreement governs how the property is managed, who benefits, and what happens when you die or become incapacitated. At a minimum it identifies:
- The grantors. The full legal names of everyone creating the trust. For jointly owned property, that means all participating co-owners.
- The trustee. The person or institution managing trust assets. In a revocable trust, the grantors usually name themselves as co-trustees so nothing changes day to day.
- A successor trustee. Whoever takes over if the original trustees die or can’t serve. This is the most consequential appointment in the document, because the successor handles distributions, debts, and property once you no longer can.
- The beneficiaries. The people or organizations who ultimately receive the property.
All grantors sign the trust document. Notarization is required in many states and is standard practice everywhere else, because it makes the document harder to challenge later.
You’ll often need to prove the trust exists when working with banks, title companies, and the county recorder. A certificate of trust does that job without revealing your beneficiaries and distribution plans. It confirms the trust’s name, creation date, and the trustee’s authority, and financial institutions routinely accept it.
Preparing and Recording the New Deed
The trust agreement alone doesn’t move anything. Ownership changes only when a new deed is signed and recorded.
A quitclaim deed is the instrument most commonly used, because you’re transferring to your own trust rather than selling to a stranger. It passes whatever interest you hold without warranting the title’s history. Some attorneys prefer a warranty deed or grant deed to keep a cleaner chain of title for a future sale or refinance. Either approach works.
The deed needs the property’s full legal description, taken from your existing deed or obtained from the county recorder. A street address is not a legal description, and an error here can cloud the title later. The current joint owners are named as grantors and the trust as grantee, typically written as something like “John Smith and Jane Smith, Trustees of the Smith Family Trust dated January 15, 2026.”
Every joint owner on the current deed must sign the new one, and all signatures must be notarized. The deed is then recorded with the county recorder’s office or register of deeds in the county where the property sits. Recording fees vary but typically run between $10 and $150 depending on the county and page count. Once recorded, the transfer is part of the public record and the ownership change is complete.
Handling the Mortgage
Most mortgages contain a due-on-sale clause that lets the lender demand full repayment if you transfer the property. Transferring to a trust changes the title holder on paper, which sounds like it would trigger the clause.
Federal law blocks that outcome. The Garn-St. Germain Act prohibits lenders from enforcing a due-on-sale clause when property is transferred into a trust, as long as the borrower remains a beneficiary and continues to occupy the property.2Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions For a standard revocable living trust where you’re the trustee and beneficiary living in the home, the protection applies directly.
Notify your mortgage servicer anyway. Loan servicing systems can flag a title change and generate letters that look alarming when no one at the servicer knows what happened. A short written notice with a copy of the recorded deed and certificate of trust usually clears things up before they become a problem.
Tax Consequences of the Transfer
Income Tax and Capital Gains
Moving jointly owned property into a revocable trust has no income tax consequences during your lifetime. The IRS treats the trust as a grantor trust, so it’s invisible for income tax purposes. Rental income, mortgage interest deductions, and everything else stay on your personal return exactly as before.1Internal Revenue Service. Abusive Trust Tax Evasion Schemes – Questions and Answers
When the grantor dies, property held in a revocable trust qualifies for a step-up in basis to fair market value at the date of death. Beneficiaries inherit the property at its then-current value rather than what you paid, which can substantially reduce capital gains tax if they sell. This is the same treatment property would receive if it passed through a will.3Office of the Law Revision Counsel. 26 USC 1014 – Basis of Property Acquired From a Decedent
Transfer and Property Taxes
Most states exempt transfers into a revocable trust from real estate transfer taxes, because the beneficial owner hasn’t changed. The exemption often needs to be noted on the deed at recording, so check your county’s requirements. Transfers to an irrevocable trust, where ownership genuinely changes hands, may not qualify.
Property tax reassessment is rarely triggered by a revocable trust transfer for the same reason. You remain the beneficial owner, and most jurisdictions don’t treat that as a change of ownership. The tax bill stays the same.
Gift Tax for Irrevocable Trusts
Transferring jointly owned property into an irrevocable trust is a completed gift in the eyes of the IRS. You’ll need to file a gift tax return, and the value of the property reduces your lifetime estate and gift tax exemption. For 2026, the annual gift tax exclusion is $19,000 per recipient, and any amount above that counts against the lifetime exemption. This is the main reason most straightforward estate plans use a revocable trust.
Update Your Insurance After Recording
Once the trust owns the property, your homeowner’s policy may no longer cover it properly. Standard policies are written for individual homeowners, not trusts. If the insurer doesn’t know about the change, they can deny a claim on the ground that the named insured no longer owns the property.
Call your insurance company after recording the deed and ask them to add the trust as a named insured or issue an endorsement reflecting the new ownership. This is usually a routine change with no premium increase.
Title insurance deserves the same call. Some older policy forms define the “insured” narrowly and don’t extend coverage to voluntary transfers, even into your own trust. More recent forms generally do cover transfers to a revocable trust, but coverage depends on when your policy was issued and which form was used. Ask the title insurer whether your coverage survives the transfer. If it doesn’t, an endorsement extending coverage to the trust and its successor trustees typically costs $50 to $150.
A Warning for Community Property States
If you’re married and live in a community property state, the way you hold title carries a tax benefit worth protecting. Under federal tax law, community property gets a full step-up in basis on both halves when the first spouse dies, not just the deceased spouse’s half. That’s a bigger benefit than joint tenancy, where only the deceased owner’s share is stepped up.
Transferring community property into a trust without careful drafting can convert it into ordinary jointly held property, destroying the community property character and the double step-up. Attorneys in these states use community property trusts drafted specifically to preserve that status. If you live in a community property state, make sure the trust document states expressly that the property keeps its community property character after the transfer.
Mistakes That Undo the Transfer
- Signing the trust but never recording a new deed. The most common failure. Without a recorded deed, the property stays in your name individually and will go through probate, which is exactly what the trust was meant to avoid.
- Only one joint owner signing. For JTWROS and tenancy by the entirety, every owner must sign both the trust agreement and the new deed. A deed signed by one joint tenant doesn’t move the whole property.
- Using the wrong property description. The legal description on the new deed must match the current deed exactly. Street addresses aren’t legal descriptions, and an error can cloud the title and cause problems when the property is later sold or distributed.
- Forgetting to update insurance. Failing to notify the homeowner’s insurer and title insurer can leave you unprotected after a covered loss.
- Ignoring the mortgage servicer. Federal law prevents the lender from calling the loan, but silence can still trigger confused letters, escrow issues, or misapplied payments.
Get the deed recorded, the mortgage servicer informed, the insurance updated, and, if you’re married in a community property state, the community property language in the trust. Those are the pieces that decide whether the transfer holds up.