When you place your home in a trust, you essentially transfer your ownership rights over the property to the trust document itself. Specifically, your appointed trustee may now manage your home until it is time to distribute it to your named beneficiary. Understandably, this may be a difficult concept for you to grasp initially. You may question what this means for your current living situation, your outstanding mortgage balance, and more. Well, if you have these concerns, please continue reading to learn what happens after you put your home into a trust and how an experienced Putnam County trusts attorney at the Law Office of Andres D. Gil, PLLC, can help you understand the specifics behind your decision.
What happens to my living situation after I put my home in a trust?
Rest assured, you may still be allowed to reside in your own home even after transferring it over to a trust. This is especially if you opted for a revocable living trust, in which you may retain control over your home for the rest of your life. So, even if you no longer wish to live here, you may be able to decide to rent it out or sell it. You may have less power when it comes to an irrevocable trust. However, within its terms and conditions, you may specify that you can continue living here rent-free.
What happens to my mortgage once I put my home in a trust?
Say you wish to place your home in a trust, but it is still mortgaged. Well, it is still possible for you to do so, so long as you understand that you remain responsible for making mortgage payments. This is regardless of your home now technically being owned by the trust. Even at the time of your death, your appointed trustee does not assume the mortgage debt. Rather, they may take your estate’s assets to pay off the balance. Only then will they distribute your remaining assets to your named beneficiaries.
Importantly, before you sign your trust document and file a new deed with your county clerk’s office, you should communicate your plans with your mortgage lender. This is because your loan may have a due-on-sale clause. This clause may allow your lender to demand a full repayment of the loan before the property is transferred. Rest assured, most lenders make an exception when this transfer goes to a trust. Nonetheless, it is worth informing them of the new deed. The same should go for your homeowners’ insurance company.
If you have made it this far, please do not hesitate to seek further information from a skilled estate planning attorney in Putnam County. The team at the Law Office of Andres D. Gil, PLLC, is willing and able to guide you through your future legal processes.
