Q: In 2012, I set up a living trust and signed a quitclaim deed to my house and property over to my daughter. If I now decide to sell my house, what do I have to do? Could she sign a quitclaim deed back to me? If I sell under her name, won’t there be a lot of taxes to pay as she never lived in this house? I think I might have made a big mistake.

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A: You might have made some mistakes, but what we’re hoping is that you’re confusing terminology.

The purpose of setting up a living trust is to clarify what happens to a property. When you own property in your own name, after you die the surviving family members don’t automatically get ownership of the home. Unless a will or other legal document spells out exactly what is supposed to happen to the property, ownership may be divided amongst a living spouse, children, other heirs or a combination of those depending on state law.

For title to transfer to these family members after your death, in the absence of key legal documents even if there is a will, they would generally have to go to probate court and have the court authorize the transfer from the deceased to the new owners of the home.

We’re assuming that you set up the living trust so that your heirs could avoid probate and you could designate who you want to own the home after you die. Or, perhaps you wanted to designate who should handle the affairs of the home.

But a living trust is like an empty shopping bag. If you don’t fill it up, it’s just an empty bag. So, once you set up the living trust document, you have to transfer assets into that living trust. You may think that you signed a quitclaim deed to your daughter, but we’re hoping that you signed a quitclaim deed transferring title of the home into your living trust.

These days, many local or county recorder of deeds offices allow users to look up the property tax parcel number online and see the documents that are on the title to the home. If you have access to the internet, you can search your county recorder’s office website and see if you can find your property documents. Once you perform the search, you should be able to find a copy of the 2012 deed. That deed should say that you conveyed title of your home from your name to the name of your living trust.

When you find the document and see that title of the home is in the living trust, you shouldn’t have to worry. Once the property is in your living trust, you can treat the home as your own. You can sell it and treat the sale as your own for federal tax purposes.

Many people forget to transfer the title to their home into their living trusts. If they forget this step, when they die, the property will have to go through probate court to transfer the title of the home.

Unfortunately, if you did use a quitclaim deed to sign over the title to your daughter and she recorded that document, you no longer own your home. Your daughter would now be the owner. Yes, you could have her convey the title back to you and then you could sell the home.

However, we see a bunch of potential problems for you under these circumstances. The IRS could claim that you did not own the home for two of the last five years. That might exclude you from obtaining the $250,000 exemption (up to $500,000 if you’re married) from federal taxes on the profits from the sale of the home.

Ilyce Glink is the CEO of Best Money Moves and Samuel J. Tamkin is a real estate attorney. Contact them through the website ThinkGlink.com.