Bill would forbid conveying real estate to trust without deed
On April 6, the Illinois Senate Judiciary Committee passed SB 2842, which is now up for consideration in the state Senate. The bill seeks to overrule the second district's holding in In re Estate of Mendelson, 2015 IL App (2d) 150084 ("Mendelson I"), which held that real property could be conveyed into a trust without a deed.
The bill, which is sponsored by Sen. Ira Silverstein, would amend the Trusts and Trustees Act to require that all transfers of property into a trust be evidenced by a written conveyance and acceptance by the trustee. It would also require that any transfer of real property into a trust be recorded with the proper county recorder of deeds.
Find out what real estate practitioners and other subject-matter authorities are saying about the bill in the May Illinois Bar Journal.
Member Comments (3)
Bad bill. Not really a problem. The recording of a conveyance is not and should not affect transfer of title
Depending on the details of the bill, it is a good idea to require a written recordable deed of conveyance to vest title. Any conveyance outside the chain of title is a bad idea for all concerned.
Recording is notice to bona fide purchasers for value. It has never been necessary to absolutely establish title. Illinois is a race notice state. Essentially this type of bill would in some sense convert the recording system to a Torrens system. Deeds could always be held in escrow which is a trust of sorts. This legislation could create a huge problem if a deed is being held in escrow when the person who placed it into escrow dies.