Friday, April 8, 2011

Is Your Home Included In Your Trust?

My fee-only associate Michael Chamberlain brought up a great point concerning your estate plan. I thought it was worth re-posting:

Having a living trust allows your appointed trustee to control your assets if you become incapacitated. This trust also enables you to avoid probate upon your passing.

When you establish your trust, your attorney will prepare a quit claim deed that transfers your home to your trust. No problem, all is good…until you refinance.

Most lenders want to place the mortgage onto the property when the home is not in trust. The lender instructs the title company to take the home out of trust and then completes the mortgage. There is no problem with this, but you must instruct the title company to transfer the home back into your trust immediately after the refinance.

When interest rates hit a recent low late last year, many people refinanced and the majority failed to put their home back into their trust!

If you have a trust and you own a home, check with your county recorder to verify that it is in the name of your trust. If you are uncertain, check with your estate planning attorney. Be particularly vigilant if you have refinanced since your trust was established.

An ounce of prevention can save tens of thousands in probate fees and prevent delays in estate closure.