If you own a house and are thinking about estate planning, you may be asking yourself if you can put a house with a mortgage into a trust. The answer is yes. You can definitely put a house with a mortgage into a revocable living trust, and it is often a good move for long-term planning.
Revocable living trust is a legal document through which you can manage your property during your lifetime and divide it efficiently upon death. One of the main benefits of using a trust is that it will allow your loved ones to save time and money from probate court. Probate is usually costly and time-consuming. Your loved ones can inherit sooner without waiting for court approval when your property is in a trust.
Some homeowners worry that they will be prevent from using a trust by borrowing money to buy a home. In most cases, this is not true. Mortgage lenders generally do not mind a home being place in a trust, especially if it is a revocable trust where you, as the homeowner, still have ownership of the property. The trick is that title movement into the trust does not extinguish the mortgage. You are still required to keep making your routine mortgage payments.
Putting a house into a trust also won’t trigger a “due-on-sale” clause, a common concern. That provision is usually designed for real sales or assignments to unrelated third parties and not for estate planning assignments with the borrow still alive and in command.
If you wish to secure your home and make it easier for you to pass your property along, a trust could be the solution. This is especially helpful if you own property in multiple states, have a mixed family, or simply wish for your own business to stay private and organized.
Want to know more about trusts and how they can help protect your home and other valuables? Our estate planning team is ready to guide you through the process. Contract us today to schedule an appointment.
