Transferring New Hampshire Real Estate into a Living Trust: Deeds and Transfer Tax Rules

For most New Hampshire residents, real estate is their most valuable asset. Whether you own a primary residence in Manchester, a commercial building in Concord, or a family cabin near Lake Winnipesaukee, ensuring that property passes to your children without court interference is a top priority. Moving real estate into a Revocable Living Trust is the most effective way to avoid the costly and public probate process.

However, transferring real estate is not as simple as writing the address on a piece of paper. It requires executing a new legal deed, navigating the state's strict tax documentation rules, and coordinating with insurance providers to ensure your property remains protected. Doing this incorrectly can lead to severe tax penalties or accidentally invalidating your title insurance policy.

Step-by-Step Property Transfer Process in NH

Executing a real estate transfer involves drafting legal conveyances and satisfying the demands of the state's revenue department.

Step 1: Choosing Between Quitclaim and Warranty Deeds

To move the property, you must draft a new deed conveying ownership from you individually to you as the Trustee of your trust. In New Hampshire, attorneys generally use a Quitclaim Deed for this purpose. A Quitclaim deed transfers your exact current interest without providing new warranties, which is perfectly suitable when you are transferring the property to yourself. Using a Warranty Deed is generally unnecessary and overly complex for a simple trust funding transaction.

Step 2: Filing the Required DRA Transfer Forms

New Hampshire requires tax documentation for almost every real estate transfer, even if no money changes hands. Within 30 days of recording the deed, both declarations must be filed with the New Hampshire Department of Revenue Administration, Concord: Form CD-57-S, New Hampshire, Department of Revenue Administration, Real Estate Transfer Tax Declaration of Consideration (Seller) and Form CD-57-P, New Hampshire, Department of Revenue Administration, Real Estate Transfer Tax Declaration of Consideration (Purchaser). In addition, the grantee must file Form PA-34, New Hampshire, Department of Revenue Administration, Inventory of Property Transfer with the department and the local town assessor.

Step 3: Understanding Transfer Tax Exemption Criteria

New Hampshire levies a hefty Real Estate Transfer Tax (RETT) of $15.00 per $1,000 of the property's value when a property is sold. Fortunately, under N.H. Rev. Stat. Ann. § 78-B:2, XXII, transfers into a revocable trust are fully exempt from this tax, provided that the grantor (you) and the beneficiary are the same person. On the CD-57 forms, your attorney will claim this specific statutory exemption, meaning you only pay the nominal county recording fees (usually under $30) to file the deed at a facility like the Rockingham County Registry of Deeds, Brentwood.

Step 4: Updating Homeowner and Title Insurance Policies

Once the deed is recorded, you must contact your homeowner's insurance agent. They need to add your new trust as an "additional insured" on your policy to ensure any future liability claims are covered. Furthermore, you should check your original owner's Title Insurance policy. Most modern ALTA (American Land Title Association) policies automatically extend coverage when a property is transferred to a revocable living trust, but you should verify this to ensure you do not inadvertently void your title protection.

Costs Associated with Trust Deeds

While the transfer tax is exempt, there are still administrative costs to budget for when transferring property: