How do I put my jointly owned rental properties into my living trust correctly? – North Carolina

Short Answer

In North Carolina, jointly owned rental property usually moves into a living (revocable) trust by signing and recording a new deed that transfers the current owners’ interest to the trustee of the trust (not “to the trust” as if it were a person). The correct deed depends on how the co-owners hold title (for example, joint tenancy with right of survivorship versus tenants in common) and what the trust is trying to accomplish at death. The “correct” approach also includes checking mortgage and insurance requirements and recording the deed with the Register of Deeds in the county where each property is located.

Understanding the Problem

In North Carolina estate planning, the core question is how to transfer a rental property that has more than one owner into a living trust without accidentally changing co-ownership rights. The decision point is usually: can a co-owner place an interest into a trust while keeping the same form of joint ownership (including any survivorship feature), or does the transfer change the ownership structure. This issue often comes up when rental income, liability management, and a clean transition at death matter, and the transfer needs to be handled through the county Register of Deeds.

Apply the Law

North Carolina generally treats a deed “to a trust” as a deed to the trustee(s) of that trust, and a deed “from a trust” as a deed from the trustee(s). Practically, that means the deed should name the trustee as the grantee (for example, “Jane Doe, Trustee of the Jane Doe Revocable Trust dated…”), and it must be recorded in the county where the real estate sits to put the world on notice of the change in title. Because co-owned property can be held with or without survivorship rights, the deed language and who signs must match the existing title and the intended result.

Key Requirements

• Correct current ownership and goal: Identify how title is held now and whether the transfer should preserve or remove any survivorship feature between co-owners.
• Proper deed and proper parties: Use a deed that transfers only the interest that can be transferred, signed by the correct owner(s), and drafted to match the intended post-transfer ownership.
• Recordation in the right place: Record the executed deed with the Register of Deeds in the county where the property is located; unrecorded deeds can create avoidable title problems later.

What the Statutes Say

• N.C. Gen. Stat. § 39-6.7 (Construction of conveyances to or by trusts) – Treats conveyances “to a trust” as conveyances to the trustee(s) and conveyances “by a trust” as conveyances by the trustee(s), helping avoid technical title defects in trust-related deeds.
• N.C. Gen. Stat. § 47-28 (Recording powers of attorney affecting real property) – If an agent signs a deed under a power of attorney, the power of attorney generally must be recorded and referenced, which commonly matters when trust funding happens during incapacity.

Analysis

Apply the Rule to the Facts: No specific facts were provided, so two neutral examples show how the outcome can change based on one variable: (1) If two co-owners hold title with a survivorship feature and one transfers that owner’s share into a revocable trust, the deed may unintentionally change or break the survivorship setup unless drafted carefully to preserve the intended rights. (2) If two co-owners hold title as tenants in common, each owner usually can deed that owner’s separate percentage interest to that owner’s trust without changing the other owner’s share, but the deed still must be recorded correctly in the county where the property is located.

Process & Timing

1. Who files: The current owner(s) shown on the deed (or an authorized agent under a properly recorded power of attorney). Where: The Register of Deeds in the North Carolina county where each rental property is located. What: A properly drafted and signed deed transferring the owner’s interest to the trustee of the living trust; if using an agent, the recorded power of attorney details must be included on the deed. When: Typically as soon as the trust is signed and the deed is prepared, and before any planned refinancing, sale, or major insurance change that depends on clear title.
2. Confirm title and lender requirements: Review the current deed and any deed of trust (mortgage) to confirm the owners of record, the vesting language, and whether the loan documents require notice or consent for changes in ownership, even if the transfer is to a revocable trust.
3. Update the “paper trail” that supports rental operations: After recording, align leases, property management authority, insurance policies, and bank accounts for rents and security deposits with the new ownership/trustee structure so that the operational documents match the recorded title.

Exceptions & Pitfalls

• Accidentally changing survivorship rights: A transfer to a trust can change how co-owners hold title. If the goal is to keep a survivorship feature between co-owners, the deed must be drafted to accomplish that result under North Carolina rules.
• Only one co-owner signs when both must sign: Some goals require both co-owners to sign (for example, if both owners want the trust to hold 100% in a specific way). A one-sided deed may only transfer that one owner’s share and may not achieve the plan.
• Loan, insurance, and lease mismatches: Even when a lender does not accelerate a loan, loan covenants, hazard insurance, and lease disclosures can require updates after a title change. Misalignment can cause claim delays or disputes.
• Using the wrong grantee name: A deed should identify the trustee and the trust with enough detail to avoid confusion in later title work. North Carolina law provides helpful rules of construction, but clean drafting reduces future title objections.
• Signing through an agent without recording the power of attorney: If an agent signs, the power of attorney recording and reference requirements can become a real-world recording obstacle and a title underwriting issue later.

Conclusion

In North Carolina, putting jointly owned rental property into a living trust is usually done by signing and recording a deed that transfers the owner’s interest to the trustee of the trust, with deed language that matches the current co-ownership and the intended result (including any survivorship rights). The key is getting the right parties, the right vesting language, and proper recordation with the Register of Deeds in the county where the property sits. Next step: record the deed with the county Register of Deeds after confirming current title and loan requirements.

Talk to a Estate Planning Attorney

If dealing with jointly owned rental properties and a living trust, planning the deed language and the recordation steps can prevent avoidable title problems later. Our firm has experienced attorneys who can help explain options, coordinate recording, and spot timing issues with mortgages and property operations. Call us today at (919) 341-7055.

Disclaimer: This article provides general information about North Carolina law based on the single question stated above. It is not legal advice for your specific situation and does not create an attorney-client relationship. Laws, procedures, and local practice can change and may vary by county. If you have a deadline, act promptly and speak with a licensed North Carolina attorney.