More and more people are creating living trusts – an estate planning strategy to ensure your assets, including your home, are protected and transferred smoothly to beneficiaries. However, once you’ve placed your home into a trust, there are crucial real estate-related steps you must take to ensure everything is legally sound.
Here are some key actions to take after transferring your home into a living trust:
- Update Your Home Insurance Policy
Your homeowner’s insurance policy needs to reflect the fact that your home is now owned by your trust. Contact your insurance provider to inform them of the change and update the policyholder’s name to include the trust. You may need to provide them with a copy of your trust document and the new deed. Ensuring your trust is properly listed can help prevent coverage issues in the event of a claim. - Adjust Your Homestead Exemption
Many states offer a homestead exemption that provides property tax relief but transferring your home to a trust can sometimes affect your eligibility. Check with your local tax assessor’s office to confirm whether your exemption remains intact and if any paperwork is required to maintain your benefits. Some states, like here in Georgia, may require you to reapply for the exemption under the trust’s name. - Notify Your Mortgage Lender (If Applicable)
If you have a mortgage on your home, your lender may have specific requirements regarding transferring the property into a trust. While federal law (the Garn-St. Germain Depository Institutions Act) generally allows you to transfer your primary residence into a revocable living trust without triggering a due-on-sale clause, it’s still a good idea to notify your lender and confirm their policies. - Update Your Property Title and Deed
Transferring your home into a trust involves executing a new deed that reflects the trust as the property owner. If you haven’t already done this during the trust setup process, consult a real estate attorney or title company to ensure the deed is properly recorded with the county. - Review Your Title Insurance Policy
Just like with your homeowner’s insurance, your title insurance policy should be updated to reflect the ownership change. Contact your title insurance company to verify that the policy still provides coverage after the transfer and make any necessary adjustments. - Ensure Utilities and Property Tax Bills Are Addressed Correctly
After transferring ownership to the trust, review your property tax bills, utility accounts, and other home-related services to confirm they reflect the correct owner name (your trust). While these bills can still be paid from your personal account, ensuring accurate records can prevent administrative issues down the road. - Communicate With Beneficiaries
Your trust should outline who will inherit your home, but it’s also wise to communicate your plans with your beneficiaries. Letting them know about the trust and how the property transfer process will work can help avoid confusion and conflicts later. - Regularly Review and Update Your Trust
Life circumstances change, and so do real estate laws. Periodically review your living trust to ensure it still aligns with your wishes and legal requirements. If you buy a new home or move to a different state, consult an estate planning attorney to determine if you need to make adjustments.
Setting up a living trust for your home is a great way to simplify the inheritance process and protect your real estate assets. It’s essential to follow through with these post-trust setup steps to maintain legal clarity and financial benefits. Consult your estate planning attorney if you have questions about your living trust.
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