Is Your Home Included in Your Trust?

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

About the author

Michael Chamberlain, CFP®

Hello. My name is Michael Chamberlain CFP®, the principal of Chamberlain Financial Planning and Wealth Management. Our firm is “fee-only” with offices in Sacramento, Campbell and Santa Cruz California. “Serving clients from the mountains to the sea.”

Our mission is to help clients realize their full potential today while planning for an abundant tomorrow through comprehensive financial planning and collaborative decision-making.

As an experienced investment and planning professional, I have had the privilege of being interviewed by and contributing to hundreds of articles in such publications as Money Magazine, Financial Planning Magazine, ABC.com, Forbes.com, Nerdwallet, NASDAQ.com, Yahoo Finance and more.

I hope that you spend some time at the FiGuide site and learn more about the financial matters important to you. To learn more about our firm, visit our website www.chamberlainfp.com or give us a call at 800-347-1340.

3 Comments

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  • Thanks for your comment. Several questions for you!

    Is your attorney a generalist or a specialist in Estate Planning? The field of law is very broad similar to medicine. If you had a heart problem you would not think of go going to a foot doctor but for some reason people often think that any attorney can best deal with any legal issue.

    Do you live in a community property State or not? If not, Trusts are a bit more complex in that you and your husband may each have a Trust.

    Probate fees vary by State. If you and your husband died the probate fee in CA for 1 million would be a minimum of $23,000. That is what goes to the Attorney who wrote your will rather than a trust. There is no probate when you have a properly funded trust.

    Do you want your financial affairs to be public or private when you die? If you prefer public go with a will. If you want them private you want a trust.

    Did your attorney recommend that you have a Power of Attorney for health and one for financial matters or a HIPAA release? These to are important documents to protect you when incapacitated.

    I am not an attorney and I never give legal advice but my advice to you is to get a second opinion as to the trust.

  • Our attorney told us we had no reason to have a trust. Our total assets are about 1 million. We have no debt, own our home and a rental home. Husband is retired getting a pension and soc. sec. totaling about $35,000 a year. Wife still working earning about $65000 a year. Please advise.

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