Definition. Propety is an legal term utilized for the conveyance of property from one party to another unincorporated third party. Conveyance means transferring, giving or borrowing. In plain English, it means you give someone else your property and in return, they will give you their property. So basically, it’s the opposite of inheritance which is the giving of something to someone, which in this case would be property.
Property can take many forms but the most common form is by deed. Another common form is by mortgage. This term refers to a lien on property which a third party has a legal right to take possession of. Another way to transfer property is with the help of a mortgage company, which is an intermediary that buys up the property, pays off all liens (equestrian lien, tax lien etc) and then transfers it to the owner (the one who wrote the check).
The main advantage of a Propety trust is the owner doesn’t have to disclose or even give notice of the conveyance. The third party only becomes aware of it when the deed is delivered. Also, under Propety, there is no valuation of the property since it never existed. Once ownership is transferred, there is no asset protection for the owner. If the owner wishes to cancel the agreement, they need to pay expenses associated with such.
Generally speaking, once a propety is created, the property owner owns the equity in the property, not the title. The property is then held by the trustee of the grant deed. This grant deed is typically recorded as an asset in the person’s name, although it may also be in the name of a third party (other than the owner).
The trustee normally holds title to the property while it is held in this manner until the owner resells it or transfers it to a third party. Once the deed is transferred, the trustee holds the lien on the title which is an asset. It is for this reason that a mortgage cannot be placed on a propety.
A Propety trust differs from a revocable living trust in that a propety trust does not need to be established to grant deed of trust. As such, there is no need for a third party. A person can simply write a grant deed of trust and use it as if it was their own. This allows a person to avoid the costs associated with asset protection and eliminates the need for a lawyer, making it easier for many people to set up a Propety trust without professional help.