What is a deed of trust primarily used for?

A deed of trust is primarily utilized as a security instrument in real estate transactions, specifically to secure a loan. It involves three parties: the borrower (trustor), the lender (beneficiary), and a third party known as the trustee. In this arrangement, the trustor conveys the title to the property to the trustee, who holds it until the loan is repaid. This means that the property serves as collateral for the loan, ensuring that the lender has recourse to the property in case of default by the borrower.

The structure of a deed of trust allows for a more streamlined foreclosure process compared to other security documents, like mortgages, making it particularly advantageous for lenders. This mechanism ensures that the lender's interest in the property is protected while allowing the borrower to retain possession and use of the property throughout the loan term.

While other options, such as transferring property ownership permanently or mechanisms for estate planning, may involve deeds, they do not accurately describe the primary use of a deed of trust, which is specifically tied to securing financing for real estate transactions.