What happens if my deeds don’t match what my trust paperwork says about who owns the properties? – North Carolina

Short Answer

In North Carolina, the deed controls what the public record shows as the owner, even if a trust document says the property should be in the trust. A mismatch can create problems when refinancing, selling, or after a death because the wrong person (or the wrong “version” of the owner) appears in the chain of title. The usual fix is to record a corrective deed or a new deed that properly transfers title to the trustee(s) of the trust, and to confirm any special ownership issues like spouses’ “tenants by the entirety” property.

Understanding the Problem

In North Carolina estate planning, a common issue arises when a trust says a home or other real estate is supposed to be owned by a trust, but the recorded deed still shows an individual owner (or shows the trust name in a way that does not match the trustee). The decision point is whether the recorded deed and the trust paperwork identify the same legal owner for the same property. When they do not match, questions often come up about whether the property is actually in the trust, who has authority to sign for a sale or refinance, and what needs to be done to align the public record with the estate plan.

Apply the Law

North Carolina treats recorded deeds as the key document for proving who owns real estate in the public record. Trust paperwork can explain how property should be managed and who benefits, but it does not automatically change the land records unless a deed (or other proper transfer instrument) is executed and recorded. North Carolina also has a rule of construction that helps when a deed or other instrument uses trust wording: a transfer “to a trust” is treated as a transfer to the trustee(s), and a transfer “by a trust” is treated as a transfer by the trustee(s). In practice, the forum for fixing a mismatch is usually the Register of Deeds in the county where the property is located, by recording a corrective deed or a new deed to the trustee(s) of the trust.

Key Requirements

Match the legal owner shown in the deed: The deed should show title in the correct name(s), which for trust-owned property typically means the trustee(s) (often with trust-identifying language) rather than only the individual settlor’s name.
Use a valid transfer and record it: To move property into (or out of) a trust, the owner shown on the current deed must sign a deed that meets North Carolina execution and recording requirements, and it must be recorded with the county Register of Deeds.
Confirm the type of ownership before transferring: If spouses own the property as tenants by the entirety, transferring it to a trust can change how the property is held and can affect creditor protection rules that apply while both spouses are living and married.

What the Statutes Say

N.C. Gen. Stat. § 39-6.7 (Construction of conveyances to or by trusts) – Treats a transfer “to a trust” as a transfer to the trustee(s), and a transfer “by a trust” as a transfer by the trustee(s), even if the instrument’s wording is not perfectly drafted.
N.C. Gen. Stat. § 41-65 (Entireties property conveyed to trusts) – Explains what happens when spouses’ tenants-by-the-entirety real property is conveyed to certain trusts and how protections may continue if specific conditions are met.
N.C. Gen. Stat. § 47-108.17 (Validation where official capacity not designated) – In certain fiduciary conveyances, a missing capacity label after the signature or in the acknowledgment does not automatically invalidate an otherwise properly executed conveyance.

Analysis

Apply the Rule to the Facts: The facts describe a mismatch between deeds and trust paperwork about who owns the properties. Under North Carolina practice, that mismatch matters because the deed is what third parties rely on to confirm ownership and signing authority. If the deed still shows an individual owner, the trust may not be treated as the record owner even if the trust document says the property is part of the trust. If the deed uses trust language inconsistently, North Carolina’s rule of construction can help interpret the transfer as being to (or by) the trustee(s), but title companies and lenders often still require clean, recordable documents that clearly show the trustee(s) as the owner.

Process & Timing

Who files: The current record owner (or the trustee(s), depending on what the deed already shows) signs the corrective transfer documents. Where: The county Register of Deeds where the property is located in North Carolina. What: Commonly a corrective deed or a new deed transferring the property to the trustee(s) of the trust (and sometimes an updated trustee certification or similar proof of trustee authority if a lender or closing attorney requests it). When: As soon as the mismatch is discovered, and especially before a refinance, sale, or a death triggers administration issues.
Next step: A closing attorney or estate planning attorney reviews the current deed, the trust’s name/date, the trustee provisions, and how the property is currently held (individual, joint tenants, tenants in common, or spouses as tenants by the entirety). This review drives whether a simple corrective deed works or whether a new deed and additional consents are needed.
Final step: Record the corrected deed and confirm the updated ownership appears in the land records. After recording, future transactions (sale, refinance, or post-death administration) usually proceed more smoothly because the chain of title matches the estate plan.

Exceptions & Pitfalls

Spouses and tenants by the entirety: If spouses own the property as tenants by the entirety, transferring it into a trust can change the form of ownership. North Carolina law allows certain trust transfers while preserving important protections in specific situations, but the conditions matter and should be confirmed before recording a deed.
“To the trust” vs. “to the trustee” wording: North Carolina law can treat a conveyance “to a trust” as a conveyance to the trustee(s), but unclear drafting can still create underwriting concerns for lenders and title insurers. Clean deed language that identifies the trustee(s) and the trust often prevents delays.
Signing capacity problems: If a deed is signed without clearly indicating the signer’s fiduciary role, it can raise questions. North Carolina has a validation rule for certain fiduciary deeds where capacity is stated in the granting clause but not repeated at signature/acknowledgment, but relying on a “fix later” approach can still cause closing delays.
Partial funding and “schedule” misunderstandings: Listing a property on a trust schedule or attachment does not, by itself, update county land records. Real estate generally requires a recorded deed to align the public record with the trust plan.
After-death complications: If the deed is still in an individual’s name at death, the property may require an estate administration step before it can be transferred, even if the trust paperwork assumed it was already in the trust.

Conclusion

In North Carolina, a deed mismatch with trust paperwork usually means the public record owner is not the same as the trust’s intended owner, which can create problems for sales, refinancing, and post-death administration. North Carolina law can treat transfers “to” or “by” a trust as transfers to or by the trustee(s), but clean land records still matter. The most important next step is to record a corrective deed (or a new deed) with the county Register of Deeds to place title in the correct trustee(s) as soon as the mismatch is discovered.

Talk to a Estate Planning Attorney

If there is a mismatch between recorded deeds and trust paperwork for real estate, an estate planning review can confirm who holds title now and what needs to be recorded to match the plan. Our firm has experienced attorneys who can help identify the cleanest way to correct the chain of title and avoid delays in a sale, refinance, or administration. 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.