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Funding Your Trust with Real Property: How to Take Title the Right Way

If you've gone through the process of creating a revocable living trust, you've already made a smart decision. A properly drafted trust lets your family avoid the South Carolina probate process—which, due to overwhelmed courts and a wave of retirees transplanting from other states, now commonly takes 18 to 36 months to settle an estate.

But here's the part that too many families miss: your trust only controls the assets that are actually in it. Creating the trust document is only half the job. The other half—transferring your assets into the trust, or "funding" it—is where things often fall through the cracks.

Why Real Estate Is the Most Commonly Unfunded Asset

Real estate requires a recorded deed to transfer ownership into your trust. Unlike bank accounts or investment accounts (which can often be retitled with a phone call and some paperwork), real property requires a properly drafted deed that names your trust as the grantee, includes your trust's exact name and date, references the correct legal description, and gets recorded at the county register of deeds office.

People create beautiful trust documents, put them in a binder on a shelf, and never get around to executing the deed. Or they buy new property after creating the trust and take title in their individual names out of habit. Either way, the property goes through probate—exactly what the trust was designed to prevent.

The Right Way: Take Title in Your Trust at Closing

The most efficient approach is to take title directly in your trust's name when you purchase the property. This means the deed at closing names "John A. Doe, as Trustee of the John A. Doe Revocable Trust dated January 1, 2025" as the grantee—rather than just "John A. Doe."

This eliminates the need for a second deed, avoids additional recording fees, and removes any chance of forgetting to transfer the property later. But it requires attention to detail at closing. Your closing attorney needs to know about your trust, coordinate with your lender, and prepare or review a certification of trust that verifies your authority as trustee without revealing the full terms of your trust to third parties.

What If You Already Own Property Outside Your Trust?

If you already own a home or other property that should be in your trust, we can prepare and record the deed to complete the transfer. This is straightforward and something we handle regularly through our affiliation with Anderson Law Firm. A trust funding review takes the guesswork out of the process and ensures all of your real property is properly titled.

Holding Companies for Second Homes and Investment Properties: Outside Liability Protection

If you own a second home, a vacation property, or a rental portfolio, you probably think about property insurance and maybe even an umbrella policy. But there's a structural layer of protection that most property owners overlook: holding title through a properly formed LLC.

The "Outside Liability" Problem

Here's the scenario most people don't think about: you own a rental property in your personal name. You're involved in a car accident (completely unrelated to the rental). The injured party gets a judgment against you personally for $500,000. Because you own the rental property in your own name, that property is now exposed to the judgment creditor. They can place a lien on it, force a sale, or garnish the rental income.

This is called "outside liability"—a claim that has nothing to do with the property itself, but that can reach the property because it's owned by you personally. It's the risk that keeps asset protection attorneys up at night.

How an LLC Creates a Liability Container

When you hold a property inside an LLC, the LLC—not you—is the owner. If someone gets a judgment against you personally, they generally cannot seize property owned by your LLC. They might be able to get a "charging order" against your membership interest (essentially a right to receive distributions if and when they're made), but they can't force the LLC to sell the property or dissolve.

The reverse is also true: if someone is injured at the rental property and sues the LLC, the judgment is limited to the LLC's assets. Your personal home, your other properties (held in separate LLCs), and your personal accounts are generally protected.

Parent-Subsidiary Structures for Larger Portfolios

For investors with multiple properties, we often recommend a parent-subsidiary structure: a holding company LLC that owns the individual property LLCs. This provides the same liability compartmentalization while simplifying management, banking, and estate planning. Each property stays in its own "container," but you manage the portfolio through a single holding entity.

Taking Title in Your LLC at Closing

The cleanest approach is to have your LLC take title at closing, just like with a trust. At Ashton Title, we verify that your LLC is properly formed and in good standing, that the operating agreement authorizes the purchase, and that the deed and title insurance policy name the correct entity. Through Anderson Law Firm, we can also form new LLCs and prepare the operating agreements specifically tailored for property holding.

FinCEN's New Residential Real Estate Reporting Rule: What You Need to Know

Starting March 1, 2026, a new federal rule from the Financial Crimes Enforcement Network (FinCEN) will require certain professionals involved in real estate closings to submit reports on specific residential real estate transactions. If you're buying property through an LLC, trust, or other entity without traditional mortgage financing, this rule applies to your transaction.

What Triggers the Reporting Requirement?

The rule targets non-financed transfers of residential real property to legal entities or trusts. "Non-financed" means the transaction doesn't involve a mortgage or loan from a regulated financial institution—so all-cash purchases, seller-financed deals, and privately financed transactions are all potentially reportable. Transfers directly to individuals with conventional mortgages are generally excluded.

Covered properties include single-family homes, condominiums, co-ops, apartment buildings, and certain vacant land intended for residential use. There is no minimum purchase price threshold—all qualifying transactions must be reported regardless of value.

What Information Gets Reported?

The "reporting person" (typically the closing attorney or settlement agent) must file a Real Estate Report with FinCEN that identifies the property, the seller, the transferee entity or trust, and—critically—the beneficial owners of the transferee. This means the individuals who exercise substantial control over the entity or trust, or who own 25% or more of the entity.

What Does This Mean for Your Closing?

If you're purchasing residential real estate through an LLC, trust, or other entity with cash or non-institutional financing, expect your closing attorney to request additional documentation. You may be asked to identify all beneficial owners, provide government-issued identification, and certify the accuracy of the information in writing.

As your closing attorney, Ashton Title handles the FinCEN reporting obligation as part of our closing services. We've been preparing for this rule through our vetClose.com compliance platform and are ready to ensure your transaction meets all federal requirements.

Download the FinCEN Compliance Information Form:
FinCEN Real Estate Report — Compliance Form (PDF)
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Joint Tenancy vs. Tenants in Common: How You Hold Title Matters More Than You Think

When you purchase real estate with another person—a spouse, a business partner, or a family member—the way your deed is worded determines what happens to that property when one of you dies. Most people don't give this a second thought at closing. They should.

The Three Common Ways to Hold Title with Others in South Carolina

Joint Tenants with Right of Survivorship. When two or more people hold property as joint tenants with right of survivorship, the surviving owner(s) automatically receive the deceased owner's share. The property passes outside of probate entirely. If John and Jane own their home as joint tenants with right of survivorship and John dies, Jane automatically becomes the sole owner. No probate filing, no waiting 18 to 36 months for the court. A simple affidavit of survivorship and a death certificate clear the title.

Tenants in Common. This is the default in South Carolina if the deed doesn't specify otherwise. Each owner holds a separate, divisible interest that they can sell, gift, or bequeath independently. Critically, there is no automatic right of survivorship. If John and Jane own property as tenants in common and John dies, his 50% interest passes through his estate—either by will or by intestacy. That means probate. If John's estate plan leaves everything to his children from a prior marriage, Jane now co-owns the home with her stepchildren.

Tenants in Common with Right of Survivorship. This is a hybrid that some South Carolina practitioners use. The owners hold separate interests (like tenants in common) but with a survivorship feature. The practical effect is similar to joint tenancy with right of survivorship, but the legal distinction can matter in certain creditor and estate planning scenarios.

Why This Matters at Closing

At Ashton Title, we don't just ask "who is buying the property?" We ask "how do you want to hold title?" If you have a living trust, the answer may be to title the property in your trust. If you're an investor, the answer may be in an LLC. If you're a married couple, we'll walk you through the survivorship options and how they interact with your estate plan.

The way your deed reads is not a minor clerical detail. It's an estate planning decision that deserves the attention of an attorney who understands the consequences.

The Garn-St Germain Act: Why Your Lender Can't Call Your Loan When You Fund Your Trust

One of the most common concerns we hear from clients who want to transfer their home into a living trust is: "Won't my bank call my loan?" The short answer is no—and federal law is the reason.

The Due-on-Sale Clause

Most mortgage agreements contain a "due-on-sale" clause that allows the lender to accelerate the loan (demand immediate full repayment) if the borrower transfers the property without the lender's consent. On its face, this sounds like transferring your home into your trust would trigger this clause.

Enter the Garn-St Germain Depository Institutions Act of 1982

Congress addressed this exact concern with the Garn-St Germain Depository Institutions Act (12 U.S.C. § 1701j-3). Section 341 of the Act specifically prohibits lenders from exercising a due-on-sale clause when the borrower transfers the property into an inter vivos (living) trust in which the borrower is and remains a beneficiary and the transfer does not relate to a transfer of rights of occupancy in the property.

In plain English: if you transfer your home to your own revocable living trust, and you continue to live in the home and remain a beneficiary of the trust, your lender cannot accelerate your mortgage. Period. It's federal law, and it preempts any contrary language in your mortgage agreement.

What the Act Does Not Protect

The Garn-St Germain Act has limits. It does not protect transfers to irrevocable trusts where the borrower gives up their beneficial interest. It does not protect transfers of investment properties to LLCs (though many lenders don't enforce due-on-sale in practice, there's no federal statutory protection for entity transfers the way there is for trust transfers). And it does not apply if the borrower is no longer occupying the property as a residence.

How We Handle This at Closing

At Ashton Title, when a client is taking title in a trust or transferring property post-closing, we ensure the trust structure qualifies for Garn-St Germain protection. We prepare or review the certification of trust, coordinate with the lender so there are no surprises, and make sure the deed is properly drafted. If you're considering funding your trust with your home, we can walk you through the process and confirm you're protected.

Why South Carolina Requires an Attorney at Every Real Estate Closing

If you've bought or sold property in another state, you may have sat at a table with a title company employee who handed you documents to sign, collected your check, and sent you on your way. That person couldn't answer legal questions, couldn't advise you on title issues, and couldn't tell you whether the deed you were signing actually protected your interests. South Carolina does things differently—and for good reason.

The Attorney Requirement

South Carolina is one of a handful of states that requires a licensed attorney to supervise every real estate closing. This isn't a technicality or a legacy rule. The South Carolina Supreme Court and the State Bar have consistently held that the preparation of deeds, mortgages, and other instruments of conveyance constitutes the practice of law, and that real estate closings involve legal decisions that require professional judgment.

This means the person overseeing your closing can identify title defects, explain the legal effect of the documents you're signing, advise on vesting options, and raise issues that a non-attorney wouldn't recognize—or wouldn't be permitted to discuss even if they did.

Not All Closing Attorneys Are the Same

Here's where it gets interesting. The attorney requirement ensures legal oversight, but it doesn't guarantee legal depth. Many closing attorneys run high-volume commodity operations. They process standard residential transactions efficiently, but they may not have the background to advise on trust funding, entity structuring, creative financing arrangements, or the new FinCEN reporting requirements.

At Ashton Title, our affiliation with Anderson Law Firm means your closing is backed by nearly two decades of experience in estate planning, business formation, and complex real estate transactions. When your transaction involves a trust, an LLC, seller financing, or a family transfer, that depth of knowledge makes a real difference.

When It Matters Most

For a straightforward purchase with conventional financing, most competent closing attorneys will get the job done. But if your situation involves any complexity—a trust taking title, an entity acquisition, owner financing, an estate settlement, or a transaction that triggers FinCEN reporting—you want an attorney who understands the legal landscape, not just the closing checklist.