Transferring Real Estate Into a Trust: Which Deed Do You Need in Missouri?

Creating a revocable living trust is a foundational component of modern estate planning for many Missouri residents. A trust provides a sophisticated way to manage your assets, plan for potential incapacity, and, most notably, allow your estate to bypass the public, costly, and time-consuming probate process.

However, a common and critical mistake is failing to "fund" the trust. Simply signing the trust document itself transfers nothing. For the trust to control your assets, you must legally transfer ownership of those assets into the trust's name.

For your most valuable asset—your real estate—this transfer requires a new deed. The question then becomes: which type of deed is appropriate? The choice between a General Warranty Deed and a Quitclaim Deed can have significant, long-term consequences for your property and your beneficiaries.

The High Cost of Waiting: Why Funding Your Trust Matters

The primary motivation for placing real estate into a trust is to avoid Missouri's probate court system. Probate is the court-supervised process of validating a will, paying the decedent's debts, and distributing the remaining assets.

While it sounds straightforward, the probate process in Missouri is notoriously slow and can be expensive.

• Time: Even a "simple" and uncontested probate case in Missouri must remain open for a minimum of six months and ten days to allow creditors time to file claims against the estate. In practice, the average probate process frequently takes nine months to a year, or even longer if complications arise. During this time, the property is effectively frozen, and your beneficiaries cannot easily sell or refinance it.

• Cost: The expense of probate is not hypothetical. Missouri law sets a statutory minimum fee schedule for both the personal representative (executor) and the estate's attorney. This fee is based on a percentage of the estate's value.

Pursuant to Missouri Revised Statute 473.153, those minimum fees are:

• 5% on the first $5,000

• 4% on the next $20,000

• 3% on the next $75,000

• 2.75% on the next $300,000

• 2.5% on the next $600,000

• 2% on everything over $1,000,000

On a $400,000 estate, the minimum fee for the attorney would be $12,150, and the minimum fee for the personal representative would be another $12,150, for a total of $24,300. These costs are paid directly from the estate's assets, diminishing the inheritance left for your loved ones.

When real estate is correctly transferred into a trust, it is no longer part of the probate estate. This single action can save your family tens of thousands of dollars and nearly a year of waiting.

The Critical Step: Choosing the Right Deed

To transfer your Missouri home or other real property to your trust, you (the "grantor") will sign a new deed transferring the property to yourself as the "trustee" of your trust. For example, the new owner would be listed as "John A. Smith, Trustee of the Smith Family Revocable Trust dated January 1, 2025."

The two most common deeds used for this purpose are the General Warranty Deed and the Quitclaim Deed.

The General Warranty Deed: The Gold Standard of Protection

A General Warranty Deed is the most robust and protective deed available. When you use this deed to transfer property, you are making several legally binding promises, or "warranties," to the new owner (in this case, your trust).

These warranties include:

1. Covenant of Seisin: A promise that you are the rightful owner and have the legal right to sell the property.

2. Covenant Against Encumbrances: A promise that the property is free of any hidden liens, mortgages, or easements (other than those already disclosed).

3. Covenant of Quiet Enjoyment: A guarantee that the new owner's title will be "quiet" and not disturbed by a third party with a superior claim.

4. Covenant of Further Assurance: A promise that you will execute any additional documents needed to fix any title defects.

By using a General Warranty Deed to fund your trust, you are ensuring that the property's strong, clear title and the protections of your existing title insurance policy are fully preserved for your beneficiaries.

The Quitclaim Deed: A Common but Risky Shortcut

A Quitclaim Deed is a much simpler document. It does the bare minimum: it transfers whatever ownership interest the grantor currently has to the grantee. It makes no promises or warranties of any kind. It essentially says, "I'm giving you my interest in this property, whatever that interest may be. I'm not guaranteeing that I own it, or that the title is clear."

Quitclaim deeds are often used for simple transfers between family members or to clear up a "cloud" on a title (like a misspelled name). It is also, unfortunately, a common shortcut used to fund trusts.

The risks of this shortcut can be severe. Using a quitclaim deed can "break the chain" of title warranties. If an unknown issue—such as an old, unpaid contractor's lien, a boundary dispute, or a forged signature from a previous sale—emerges years later when your beneficiaries try to sell the property, they may find their title insurance policy is voided. The quitclaim deed offers them no recourse, forcing them to spend their own money to defend the title in court.

A Common Point of Confusion: A "Deed of Trust" is NOT a Deed to Your Trust

It is vital to distinguish the deeds discussed above from a "Deed of Trust." In Missouri, a Deed of Trust (also called a trust deed) is not used to transfer property into an estate planning trust.

Instead, a Missouri Deed of Trust is a financing instrument, much like a mortgage. It is a three-party document involving you (the borrower), your lender, and a "trustee" (a neutral third party) who holds the legal title to the property as security until the loan is paid off.

Do not confuse these terms. You use a Warranty or Quitclaim Deed to fund your living trust. You use a Deed of Trust to secure a loan for your property.

Making the Right Choice to Protect Your Missouri Real Estate

When funding a trust, the choice of deed is a critical legal decision. While a quitclaim deed might seem like a simple and affordable option, it can inadvertently create catastrophic risks for the people you are trying to protect.

In nearly all cases, a General Warranty Deed is the superior and safer method for transferring real estate into your trust, preserving the chain of title and the validity of your title insurance.

Navigating the nuances of real estate law, deeds, and trust funding requires careful, professional guidance. Consulting with an experienced real estate deed lawyer ensures your property is transferred correctly, your assets are protected, and your estate plan will function exactly as you intend. To secure your legacy without creating future burdens for your family, contact an affordable real estate lawyer to discuss the right legal instruments for your specific situation.

Contact Information:

Affordable Legal Services

1200 E Woodhurst Dr t100
Springfield, MO 65804
United States

Joseph Piatchek
(417) 895-9501
https://www.affordablelegalservicesllc.com/