Transferring Real Estate from a Living Trust in New Hampshire

A trust is a property interest wherein a settlor conveys assets to a trustee, who holds the title to those assets for the benefit of a third party (the beneficiary). Valid trust instruments also identify the relevant assets, state the settlor’s intentions for them, and are created for lawful purposes. Settlors (owners) transfer real property into a trust by executing and recording a deed.

In New Hampshire, real estate is generally conveyed out of a living trust with a quitclaim deed. Because a trust is not an entity that can legally hold title to property, the trustee holds title as the trust’s representative. In a deed transferring real property from a living trust, then, title is conveyed from the trust by the trustee as grantor to the purchaser (grantee).

In many states, a quitclaim deed contains no warranties of title, and only conveys the grantor’s (settlor’s) interest in the property. In New Hampshire, however, a statutory quitclaim deed carries covenants generally associated with a special warranty deed, specifically “that at the time of the delivery of such deed the premises were free from all incumbrances made by the grantor, except as stated, and that the grantor will…warrant and defend the same…against the lawful claims and demands of all persons claiming, by, through or under the grantor, but against none other” (477:28). The quitclaim deed in New Hampshire conveys title with fewer covenants than a warranty deed, which carries covenants of seisin (that the grantor possess valid title and good right to convey, not having contracted to convey the title to another) and warrants that the grantor will defend the title against claims of all persons.

The word “grant” in a conveyance of real property is sufficient to transfer interest in the State of New Hampshire without covenants (RSA 477:24). The granting clause in a quitclaim deed must specifically contain the words “with quitclaim covenants” to transfer fee simple title with the associated covenants (477:28).

Because a trustee is executing the deed on behalf of the trust, “It may be significant…to understand the liability he is assuming if the purchase and sales agreement is completed asking for a warranty deed,” because “agreeing to provide title by warranty deed is agreeing not only to pass the title as he held it during his time as a fiduciary, but…also agreeing to defend the title and back title…even though the executor may have no personal knowledge or frame of reference as to any encumbrances or out-conveyances that affect the property” [1].

This is particularly important to remember in conveying homestead property. Under RSA 480:5-a, deeds must be signed by the grantor and joined by the spouse, if any, to release homestead rights. New Hampshire Title Standard 5-5 specifically addresses homestead release in the context of revocable trusts, stating that a deed conveying real property to a trustee of a trust does not release the homestead rights of the grantor (settlor), unless there is an express release present in the form [1]. Therefore, a subsequent deed by trustee out of the trust may need to be executed by the settlor and joining spouse releasing their individual homestead rights. See RSA 480:9 for more information on homestead rights and revocable trusts.

When a quitclaim deed is used to transfer property from a living trust, the trustee’s name should appear on the form along with the name and date of the trust on behalf of which the trustee is acting. A deed by a trustee should meet all content requirements for documents affecting title to real property in the State of New Hampshire, including a legal description of the property being conveyed. See RSA 478:4-a for recording requirements. The deed should be signed and acknowledged by all acting trustees of the trust before being recorded in the registry of deeds in the county in which the real property subject to the transaction is located.

Additional documentation may be required to accompany a deed from a trustee of a living trust. Though not always necessary for passing title, as the New Hampshire Bar Association notes, “In dealing with a concurrent transaction, it may be prudent to require more evidence of existence, capacity and authority…or a trustee’s certificate complying with RSA 564-A:7… or RSA 564-B:10-1013” [2]. See New Hampshire Title Standard 5-20 and consult a lawyer for more information regarding trustee’s certificates and certifications of trust.

Any conveyance of real property in New Hampshire requires a completed Form CD-57 declaring the consideration given for the transfer. The form is used by the Department of Revenue Administration (DRA) in calculating transfer taxes. The Bar notes that “certain transfers into and out of a revocable grantor trust are only subject to the minimum transfer tax. However, a sale of real estate held in trust by a trustee to a third party is subject to the full transfer tax” [3].

View Available New Hampshire Real Estate Deed Forms

Talk to a lawyer with any questions about conveyances of real property from living trusts in New Hampshire, as each situation is unique.