Deed Transferring Real Property into Living Trust - Michigan

Drafted by:
[____________________________________]
[____________________________________]

When recorded return to:
[____________________________________]
[____________________________________]

Send subsequent tax bills to:
[____________________________________]

County: [____________] County, Michigan
Tax Parcel ID No.: [____________]

SPACE ABOVE THIS LINE RESERVED FOR REGISTER OF DEEDS RECORDING STAMP

QUITCLAIM DEED — TRANSFER TO REVOCABLE LIVING TRUST

State of Michigan

1. GRANTOR

[GRANTOR FULL LEGAL NAME], [a single person / a married person / husband and wife], whose address is [____________________________________] ("Grantor").

2. GRANTEE / VESTING IN TRUSTEE

[GRANTOR FULL LEGAL NAME], as Trustee of the [TRUST NAME] dated [__/__/____], and any successor trustee then serving under that trust instrument and any amendments to it, whose address is [____________________________________] ("Grantee" or the "Trustee").

The Property is conveyed to the Trustee to be held, administered, and distributed according to the terms of the [TRUST NAME] dated [__/__/____] (the "Trust"). Title vests in the Trustee, and in any successor trustee, without the necessity of any further conveyance, in accordance with the powers granted under the Trust and under the Michigan Trust Code, MCL 700.7101 et seq.

The Grantor named above is the settlor of the Trust, and the sole present beneficiary of the Trust is the settlor [and/or the settlor's spouse]. (This recital supports the property-tax uncapping exemption — see Section 7.)

3. CONSIDERATION

This conveyance is made for estate-planning purposes only, with no change in beneficial ownership of the Property. The consideration is less than One Hundred Dollars ($100.00) — no monetary consideration. The Grantor is the settlor and a present beneficiary of the Trust during the Grantor's lifetime. No sale, purchase, or exchange has occurred.

4. GRANTING CLAUSE

The Grantor, for the consideration stated above, the receipt of which is acknowledged, hereby QUITCLAIMS to the Grantee, as Trustee as aforesaid, and to the Grantee's successors in trust and assigns, all of the Grantor's right, title, and interest in and to the following described real property (the "Property"):

Property commonly known as: [STREET ADDRESS, CITY, MICHIGAN, ZIP]

County: [____________] County, Michigan

Legal Description: See Exhibit A attached hereto and incorporated by reference.

Being the same premises conveyed to the Grantor by deed recorded in the [____________] County Register of Deeds in Liber [____], Page [____] (or Document/Instrument No. [____________]).

TO HAVE AND TO HOLD the Property, together with all improvements, tenements, hereditaments, and appurtenances belonging to it, unto the Grantee, as Trustee, and the Grantee's successors in trust and assigns forever.

5. SUBJECT TO

This conveyance is made subject to:

(a) Property taxes and assessments for the current and subsequent years, not yet due and payable;
(b) Easements, covenants, conditions, restrictions, reservations, and rights-of-way of record;
(c) Applicable zoning, subdivision, building, and environmental laws and regulations; and
(d) Any mortgage of record, which the Trustee takes subject to but does not assume except as separately agreed in writing.

6. PURPOSE; PRINCIPAL-RESIDENCE EXEMPTION AND TITLE-INSURANCE CONTINUITY

6.1 Estate-planning purpose. The sole purpose of this conveyance is to fund the Grantor's revocable living trust so the Property may pass on the Grantor's death under the terms of the Trust without probate administration. The Grantor reserves all rights to amend or revoke the Trust and to direct reconveyance of the Property at any time.

6.2 Principal Residence Exemption (PRE). The parties intend that the Grantor's Principal Residence Exemption (MCL 211.7cc), if applicable, continue uninterrupted after this conveyance. A transfer into the Grantor's own revocable trust where the settlor remains a beneficiary generally does not terminate the PRE; the Grantor should confirm with the local assessor and, if requested, file an updated PRE affidavit (Form 2368).

6.3 Title insurance. Re-titling into a trust can affect an existing owner's title insurance policy. The Grantor should request an endorsement naming the Trustee as an insured, or confirm coverage continuity, with the title insurer before recording.

7. TRANSFER-TAX EXEMPTION, TAXABLE-VALUE UNCAPPING, AND GARN-ST GERMAIN RECITALS

7.1 State and county Real Estate Transfer Tax — EXEMPT. Michigan deeds are ordinarily subject to the State Real Estate Transfer Tax ($3.75 per $500 of value — MCL 207.526) and the County Real Estate Transfer Tax ($0.55 per $500 of value; up to $0.75 in counties over 2 million — MCL 207.505). This conveyance is EXEMPT because the value of the consideration is less than $100.00 (MCL 207.526(a)), a no-consideration estate-planning transfer that is not a sale.

EXEMPTION RECITAL (state on the face of the deed): "This transfer is exempt from the State Real Estate Transfer Tax under MCL 207.526(a) and from the County Real Estate Transfer Tax under MCL 207.505(a) because the consideration is less than $100.00."

7.2 CRITICAL — Property-tax taxable value is NOT uncapped (MCL 211.27a(6)(c)). A conveyance to a trust is a "transfer of ownership" — which would uncap the property's taxable value to 50% of true cash value in the following year — UNLESS the grantor stated on the deed is the settlor (or the settlor's spouse) AND the sole present beneficiary of the trust is the settlor (or the settlor's spouse) or both. When those conditions are met, the conveyance is NOT a transfer of ownership and the taxable value does NOT uncap. This deed satisfies those conditions (see Section 2 recital).

TO PRESERVE THE CAP, YOU MUST STILL FILE THE PROPERTY TRANSFER AFFIDAVIT. A Property Transfer Affidavit (Form 2766, also numbered L-4260) must be filed with the local assessor within 45 days of the transfer (MCL 211.27a / 211.27b), even though the transfer is exempt from uncapping. On the affidavit, indicate that the transfer is to a revocable trust meeting the MCL 211.27a(6)(c) exemption (grantor = settlor; sole present beneficiary = settlor/spouse). Filing the affidavit and noting the exemption is what prevents the assessor from erroneously uncapping the taxable value. Failure to file the affidavit can result in penalties and an incorrect uncapping.

7.3 Limited due-on-sale protection (Garn-St Germain Act). If the Property is residential real property containing fewer than five dwelling units and secures a real property loan, 12 U.S.C. § 1701j-3(d)(8) bars the lender from exercising a due-on-sale clause for a transfer into an inter vivos trust in which the borrower is and remains a beneficiary and that does not transfer occupancy rights. Confirm every element before relying on the exemption. The borrower remains personally liable on any existing note.

8. EXECUTION

IN WITNESS WHEREOF, the Grantor has executed this Quitclaim Deed on [__/__/____].

GRANTOR:

____________________________________
[GRANTOR FULL LEGAL NAME]

____________________________________
[SPOUSE / CO-GRANTOR FULL LEGAL NAME] (if applicable)

9. NOTARY ACKNOWLEDGMENT (Michigan)

The foregoing instrument was acknowledged before me on this ____ day of ______________, 20____, by [GRANTOR FULL LEGAL NAME] [and [SPOUSE / CO-GRANTOR FULL LEGAL NAME]], known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the foregoing instrument, who acknowledged executing the same voluntarily.

____________________________________
Notary Public, State of Michigan
County of ______________, Acting in ______________ County
Printed Name: ______________________
My commission expires: ______________

(Affix notarial seal)

10. RECORDING AND TAX-FORM INSTRUCTIONS

1. Where to record. Record the original, signed, acknowledged deed with the Register of Deeds for [____________] County, Michigan (MCL 565.491). Meet the MCL 565.201 formatting requirements (2.5-inch top margin on the first page; preparer name; grantor/grantee names and addresses; return address; legible type).
2. State the transfer-tax exemption on the face of the deed (Section 7.1, MCL 207.526(a) / 207.505(a)). A proper claim of exemption must appear for the deed to record without revenue stamps.
3. FILE THE PROPERTY TRANSFER AFFIDAVIT — Form 2766 (L-4260). Within 45 days of the transfer, file the Property Transfer Affidavit with the local assessor (city or township) — NOT the Register of Deeds. Claim the MCL 211.27a(6)(c) trust exemption so the taxable value is not uncapped. This is the single most important post-transfer step in Michigan.
4. Principal Residence Exemption. Confirm the PRE (MCL 211.7cc) remains in place; file an updated PRE affidavit (Form 2368) with the assessor if requested.
5. Recording fee. Pay the per-document recording fee charged by the Register of Deeds.
6. Update collateral records. After recording, (a) obtain written instructions from the insurer on how the owner, Trustee, Trust, and lender should appear on the policy; (b) provide a recorded copy and Certification of Trust (MCL 700.7913) to the title company; and (c) record this deed before any closing on a sale or refinance.
7. Compare with the Lady Bird (enhanced life estate) deed. Michigan also recognizes the "Lady Bird" deed as a separate non-probate tool; it is not a substitute for funding an existing revocable trust by deed.

EXHIBIT A — LEGAL DESCRIPTION

[INSERT THE COMPLETE LEGAL DESCRIPTION EXACTLY AS IT APPEARS ON THE GRANTOR'S CURRENT VESTING DEED — metes-and-bounds, or lot/block with subdivision and liber/page of the recorded plat, together with the tax parcel ID and the prior deed liber/page. Attach surveys or additional pages as needed.]

____________________________________

____________________________________

____________________________________

Sources and References

• MCL 565.151, 565.152 — statutory warranty and quitclaim deed forms.
• MCL 565.201 — requirements for recording (margins, preparer, parties' addresses, return address).
• MCL 565.491 et seq. — recording with the Register of Deeds of the county where the land lies.
• MCL 565.8 — acknowledgment of deeds.
• MCL 207.526 — State Real Estate Transfer Tax Act; (a) consideration under $100 exemption. (Michigan Legislature; Justia)
• MCL 207.505 — County Real Estate Transfer Tax Act; exemptions.
• MCL 211.27a(6)(c) — a conveyance to a trust is a transfer of ownership unless grantor = settlor/spouse and sole present beneficiary = settlor/spouse; if met, NOT a transfer of ownership (no taxable-value uncapping). (Michigan State Tax Commission, Transfer of Ownership Guidelines)
• MCL 211.27a / 211.27b — Property Transfer Affidavit (Form 2766 / L-4260) required within 45 days of transfer.
• MCL 211.7cc — Principal Residence Exemption.
• MCL 700.7101 et seq. — Michigan Trust Code; MCL 700.7913 (certification of trust).
• 12 U.S.C. § 1701j-3(d)(8) — qualifying residential inter vivos trust transfer

This document is provided for informational purposes only and does not constitute legal advice. The most important Michigan-specific step is filing the Property Transfer Affidavit (Form 2766 / L-4260) within 45 days and claiming the MCL 211.27a(6)(c) trust exemption to avoid taxable-value uncapping. Consult a licensed Michigan attorney before executing or recording this deed.