Can I transfer real estate into a trust while I’m still living in the home? – North Carolina

Short Answer

Yes. In North Carolina, a homeowner can transfer a house (and other real property) into a living trust and still live in the home. The transfer is usually done by signing and recording a new deed that moves title from the individual owner to the trustee of the trust. The main practical issues are making sure the deed is drafted and recorded correctly, and checking for mortgage and insurance requirements before recording.

Understanding the Problem

In North Carolina estate planning, the question is whether a parent can place a primary residence into a family trust and keep living there as usual. The decision point is whether the parent wants the trust to own the home now (during the parent’s lifetime) rather than leaving the home to pass through a will later. The key trigger is the act of changing legal title by deed while the parent is still alive and occupying the property.

Apply the Law

Under North Carolina law, a trust can hold title to real estate, but the trust does not “own” the property automatically just because the trust document exists. To move real estate into the trust during life, the current owner typically signs a deed transferring the property to the trustee of the trust, and that deed is recorded with the Register of Deeds in the county where the property is located. If someone signs the deed as an agent under a power of attorney, North Carolina has specific recording rules for the power of attorney that often need to be handled before (or referenced in) the deed recordation.

Key Requirements

A trust and a trustee are in place: The deed must name the trustee (and usually the trust name/date) so the public record clearly shows who holds title and in what capacity.
A properly executed deed transfers title: The parent must sign a deed that conveys the property from the parent’s individual name into the trustee’s name (for the trust). The trust document alone does not change the deed.
Recording in the correct county: The deed must be recorded with the Register of Deeds where the land lies so the transfer is reflected in the public records and can be relied on for future sales, refinancing, and title work.

What the Statutes Say

N.C. Gen. Stat. § 105-317.2 (Deed transfer reporting information) – Requires certain information to be included in deeds, including whether the property includes the primary residence of a grantor; noncompliance does not invalidate an otherwise duly recorded deed.
N.C. Gen. Stat. § 47-28 (Recording power of attorney affecting real property) – Sets rules for recording a power of attorney (or certified copy) used to sign a real estate transfer, and for referencing that recording information in the deed.
N.C. Gen. Stat. § 105-228.30 (Real property excise tax) – Imposes an excise tax on instruments conveying an interest in real property, generally based on consideration or value, and requires payment before recording.
N.C. Gen. Stat. § 105-228.29 (Excise tax exemptions) – Lists transfers that are exempt from the excise tax article, including certain transfers where no consideration is due or paid.

Analysis

Apply the Rule to the Facts: Here, an adult child is helping a parent create a family trust and move a home and other real property into that trust. If the parent creates a revocable living trust and names a trustee (often the parent as initial trustee), the parent can sign a deed transferring the home into the trustee’s name for the trust and continue living there. The transfer will be effective in the public record once the deed is recorded in the county Register of Deeds where the property is located.

Process & Timing

Who files: The current owner (the parent) signs the deed, or an agent signs under a properly recorded power of attorney. Where: The Register of Deeds in the North Carolina county where the land is located. What: A new deed transferring the property to the trustee of the trust; if an agent signs, the recorded power of attorney details may need to be referenced. When: Typically after the trust is signed and before any planned incapacity planning deadline (for example, before a health event makes signing difficult).
Recording and fees: The Register of Deeds will collect recording fees and may collect excise tax if applicable. Whether excise tax applies can depend on how the deed is structured (for example, whether consideration is stated and whether an exemption applies), so the deed should be prepared carefully.
After recording: The trustee should keep the recorded deed with the trust records, update homeowner’s insurance and any umbrella coverage to reflect the trust/trustee as an insured where appropriate, and confirm the mailing address for tax bills is correct.

Exceptions & Pitfalls

Mortgage and “due-on-sale” concerns: Even when the transfer is to a living trust, a mortgage or home equity line may have notice requirements. The safest practice is to review the loan documents and talk with the lender before recording.
Incorrect deed language: Deeding property to “the trust” instead of properly naming the trustee (or failing to identify the trustee’s capacity) can create title problems later. Clean title matters if the home is later sold, refinanced, or insured.
Power of attorney recording issues: If the parent cannot sign and an agent signs, North Carolina has specific rules about recording the power of attorney and referencing its recording information in the deed.
Insurance and tax billing mismatches: After the deed is recorded, insurance and county tax records should match the new ownership structure so claims handling and notices do not get delayed.
Not “funding” the rest of the trust: A trust plan often fails when only the document is signed but assets are never retitled. Real estate, bank accounts, and other property may each require separate steps.

Conclusion

In North Carolina, a homeowner can transfer a home into a living trust and keep living in the property. The key requirement is changing title by signing a deed that transfers the property to the trustee of the trust and recording that deed with the Register of Deeds in the county where the land is located. The most important next step is to have an attorney prepare the correct deed and record it promptly after the trust is signed.

Talk to a Estate Planning Attorney

If a parent is creating a family trust and planning to transfer a home or other real property into the trust while still living there, our firm has experienced attorneys who can help explain the options, prepare the deed, and avoid common recording and title problems. 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.