What is a Propety Trust?
What exactly is Property Trust? Propety is an informal legal term utilized for the legal transfer of property from one party to an other party which is a non-judgmental entity. Transfer means lending, transferring or giving. The whole concept is fairly simple.
Propety agreements are usually drawn up between parties that own real property and involve property ownership by one party and an equal or nearly equal amount of value in exchange for a deed of trust that authorizes the transferring of the property. These deeds of trusts may be mortgages, proprietary interests or franchises. In all cases, the intention of the parties to the Propety transaction is to put their property in joint tenancy, so that upon the death of one of the principals the property transfers to (and is held under) the surviving principal.
Under Propety, one party transfers the property to a third party without the intervention of court proceedings; therefore, property placed in this form of trust does not need to be recorded. The parties typically make the transfer in a simple and brief manner that involves signing of title and the assignment of the property to the party making the transfer. There is no pre-deed notification requirement in Propety transactions. Once the property is transferred, the parties are considered to have entered into a legally binding contract that clearly describes the details of the property and any obligations of the parties to each other under the terms of the trust.
In addition, the parties in a Propety trust hold title to the property and jointly hold the interest in the property in common after the death of one of the principal. This type of trust is often used by owners who want to transfer property to relatives who do not share their interest in the property. The other parties to the trust often hold an equal interest in the property and jointly hold the property after the death of the owner. This ensures that the deceased owner’s personal belongings will be equally shared among all beneficiaries.
The most important thing about a Propety trust is that it is simple and easy to establish. There are very few requirements other than the age of the individual taking out the trust. One can also use a general proof of power of attorney. A living trust is created by revising and signing an execute or deed of trust, commonly called a living trust deed. This document has specific language about who should make payments and who should receive payments.
A Propety trust does not have all the complexities found with irrevocable trusts. For example, there is no need to name an executor to handle the estate when one dies. Also, property transferred under a Propety trust does not have to be sold to pay off creditors, as is often required under an irrevocable trust. Furthermore, there is no need to disclose the fact that the property is under a Propety trust. An owner of a Propety trust can avoid probate and inheritance taxes by passing property to his or her estate before death. And, unlike with an irrevocable trust, if there is an early payment of taxes owed, the beneficiaries of the trust get the money before the property is transferred.