Discussion Forum

MichaelR
Electrical Contractor

Taking Title Directly Into Trust

Sunday, September 07 2008 08:21 PM

Dear Sirs,

I own your courses and am happy to say that I made the wise choice to purchase them.

I'm interested in taking title DIRECTLY into the land trust in CA.

I've been told by both escrow and others that the Lender will NOT allow a buyer to take title directly into a Land Trust, and that a person must take title as a single man first, then file a "Deed To Trust" immediately after.

I'm also not sure if a "Preliminary Change of Ownership Report" needs to be filed in CA to put property into a land trust.

If you could please help shed some light onto these two issues, it would be great insite above and beyond what I have already learned in your courses.

Thanks in Advance,
Michael R

REPLY

MichaelR
Electrical Contractor

Re:Re:Taking Title Directly Into Trust

Monday, September 08 2008 10:54 AM

Thanks for the quick reply!

OK, well since I am not a big-time investor ... I'm dealing with Conventional Loans in a Residential market.

So - my question then becomes - "Is it not possible for an individual to take title directly into his trust using a Conventional Lender that WILL resell the loan?"

I would sincerely appreciate it if you could please shed some light on my two questions as well:

A) Is it true that the next best thing to do is that a person must take title as a single man first, then file a "Deed To Trust" immediately after.

A Part2)  Where does the "Deed To Trust" get filed (like which county office please)

B) I'm also not sure if a "Preliminary Change of Ownership Report" needs to be filed in CA to put property into a land trust.  Does it need to be filed in addition to the Deed To Trust?

Thanks in Advance for your time, experience, replies and assistance!

Michael R

REPLY

MichaelR
Electrical Contractor

Re: The Preliminary Change of Ownership Report

Monday, September 08 2008 11:53 AM

Thank you for the quick reply Randy.

Just for future forum members from CA - I found this :

(Re: The Preliminary Change of Ownership Report)

http://assessor.lacounty.gov/extranet/lac/control/binaryGet.aspx?uploadid=327

Which says that for Los Angeles County This form IS required for quitclaim deeds however it excludes the deed of trust as a document which requires this report to be filed.

Thanks for the Help!

Michael

REPLY

danron17
mortgage broker, real estate investor

Re:Re: The Preliminary Change of Ownership Report

Tuesday, September 09 2008 06:11 PM

Hello,
I'm in Solano County in Northern California. In order to record a Warranty Deed to Trustee, the Recorder requires the following documents:
1. Preliminary Change of Ownership Report
2. Transfer Tax Information Statement

In Paragraph H of the Preliminary Change of Ownership Report, the following question is asked:

"H. Is this a transfer of property:" (four choices, 1,2,3, & 4 follow)

I usually pick selection 1, which reads:

"to a revocable trust which may be revoked by the transferor and is for the benefit of the __ transferor __ transferor's spouse?"

I select (or my client selects) "transferor." If there are two or more beneficiaries on title, "transferor" is still the selection.

Regarding the Transfer Tax Information Statement, you need to include this statement to "prove" that no change in ownership occurs. No change in ownership means no TRANSFER TAX.

The Recorder told me that she believes the Preliminary Change of Ownership Report is used in all or most counties in California.

Each county tends to have its own brand of taxing methods, which means the Transfer Tax Information Statement may or may not be required, or a different form may be used.

I hope this helps.

Regards,

Daniel Brown
danron17

REPLY

danron17
mortgage broker, real estate investor

Re:Re: The Preliminary Change of Ownership Report

Wednesday, September 10 2008 04:30 PM

Hello Michael,

I use the trust documents from Mark Warda's "Land Trusts for Privacy & Profit" (The book you mentioned). I had all my forms reviewed by a law firm (Parker-Stanbury). If you enroll in Pre-Paid Legal Services, that's the law firm for California.

Keep in mind that the "notary wording" (Acknowledgements) for all forms notarized in California changed on January 1, 2008. This means that, unless you use the proper wording for your Acknowledgements, the Recorder will "kick back" your forms. Many people, even some lawyers, in California don't know this yet. Go to the Secretary of State's site (business portal) for the correct information.

Your Trust forms (Warranty Deed to Trustee and Trust Agreement) are NOT county-specific. Once your INFORMED lawyer has reviewed and OKAYED them, you can use those forms throughout California. If you are using "boilerplate" forms, just be certain to read them and remove references that mention other states, etc.

Like you, I have the Basic and Advanced courses from the Hughes Brothers, which contain all the information. But they can't possibly alert you to all the problems you may encounter when you deal with the "local authorities." For example, not all the people at the Counter in the Recorder's office are knowledgeable beyond the basic stuff. When I recorded my first warranty deed to trustee, I had to speak to the manager in order to get things done. Now I have no problems.

I hope this helps. Also, I am always eager to hear about how things are working in California. As you may know, even escrow procedures in Northern California are different from those in Southern California.

Regards,
Daniel Brown

REPLY

MichaelR
Electrical Contractor

Re: The Preliminary Change of Ownership Report

Wednesday, September 10 2008 04:42 PM

Daniel,

Any possibility you might be able to contact me directly?

I have a few more questions (that maybe should be discussed off forum) - and sure would appreciate your input.

phoenixpua  at  gmail   dot  c0m

Thanks in Advance!
Michael

REPLY

MichaelR
Electrical Contractor

Re:Re: The Preliminary Change of Ownership Report

Thursday, September 11 2008 01:14 AM

I was told this by an attorney today :

"Michael, you are correct regarding the two ?forms? necessary for a valid Land Trust. The trust agreement creates the trust under state law, and the deed properly conveys the property into the trust under state law. Forms 56 and 56-A are IRS forms that the Service requires to be filed providing notice of a fiduciary relationship for federal tax purposes, in this case, the trustee acting on behalf of the trust. The forms really have nothing to do with the validity of the trust. Hope this helps!"

Thank You Karen !!

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