Can I do that? Placing a Home with a Mortgage into a Revocable Trust

As an attorney there are certain questions I get asked a lot. I decided to make a series of such questions called the “Can I do that?” series. If you’ve ever wondered if you can do something specific with a trust or will, this blog series should help you find some answers.

One such question is, “I have a mortgage on my home, can I still put it in my trust?” Along with this question comes the assumption that they don’t own their home because they are paying a mortgage on the property. This is a normal “Can I do that??” question, so don’t feel like you’re the only one with this concern.  Generally speaking, yes you can place your home in a trust, even if there is a mortgage.

Understanding Revocable Trusts

First, let's clarify what a revocable trust is. A revocable trust is a legal arrangement where you, as the grantor, transfer ownership of your assets into a trust. The trust is managed by a trustee (which can be you). Unlike an irrevocable trust, a revocable trust allows for changes or revocation during your lifetime.

Benefits of Placing a Home in a Revocable Trust

There are several benefits that come with placing your home, including one with a mortgage, into a revocable trust:

1.     Avoiding Probate: One of the main advantages of a revocable trust is the ability to avoid probate, the court process that distributes assets upon your passing. By placing your home in a trust, you can ensure a smoother transfer to your beneficiaries, saving time and money.

2.     Maintaining Control: Placing your home in a revocable trust doesn't mean relinquishing control. As the grantor, you can continue to live in your home, manage it, and enjoy the benefits of homeownership without any significant changes.

3.     Protection and Privacy: Placing your home in a revocable trust can provide an extra layer of protection and privacy. When assets are held in a trust, they are not subject to public scrutiny, ensuring your personal affairs remain confidential.

How does a Mortgage Affect the Trust?

Now, let's address the mortgage aspect. Placing a home with a mortgage into a revocable trust is possible, but it's essential to follow the necessary steps:

1.     Review Mortgage Terms: Before proceeding, review the terms of your mortgage agreement. Some lenders may have due-on-sale clauses that could potentially be triggered when transferring ownership to a trust. It's crucial to ensure that transferring your home to a trust will not violate any terms of your mortgage.

2.     Notifying the Mortgage Lender: Once you have reviewed the mortgage terms, it is advisable to inform your lender about your intention to place your home in a revocable trust. This step allows you to seek clarification and ensure compliance with any lender requirements.

3.     Transferring Ownership: With your lender's approval, work with an experienced attorney to transfer ownership of your home to the revocable trust. This process typically involves executing a deed that transfers the property from your name to the trust. I routinely assist clients with placing their mortgaged property into their revocable trust.

Seek Professional Guidance

Navigating the intricacies of placing a home with a mortgage into a revocable trust can be complex, and frankly, overwhelming. The good news is you don't have to do it alone. You should seek the guidance of an experienced attorney who specializes in estate planning and trusts to ensure that your wishes align with the legal requirements.

At Law Office of Sharyna Scott, we are dedicated to helping individuals like you make informed decisions about their legacy and being your advisor every step of the way.  Our goal is to provide you with the confidence and peace of mind you deserve when planning your legacy.

Contact us today to discuss your estate planning goals and explore the best options for placing your home into a revocable trust. Together, we can create a plan that reflects your wishes and sets the foundation for a more secure future.

Next Generational Wealth Workshop: 8/10/23

Generational Wealth Workshop: How to Pass on your Property

We’re partnering with ASCENDTIALS again for another generational wealth workshop at Cafe X!

If you have ever wondered about how to make sure your home or family owned land can be passed on to your kids, a nonprofit organization, or future generations, this workshop will be beneficial for you. Join us on Thursday August 10 at 6pm. You can sign up for the workshop HERE

Sign Up for our Next Online Seminar

Estate Planning Essentials: Trusts

We had such a great response to our last seminar on trusts, we’re going to do it again!

Join Sharyna Scott as she gives an overview on revocable trusts and how they can help you protect and plan for your estate.

Join the Facebook live seminar on Thursday, August 24 at 7PM PST, or watch the replay. It’s recommended that you watch live to take advantage of a special promotion that will be available for short time.

You can find more information and sign up for the event HERE

Estate Planning Essentials: Trusts & Probate

We have our second seminar on the essentials of estate planning coming up on Thursday, May 25!

Come ready to learn about the importance of a trust for your estate plan, and how you can use it to pass along your assets without the need for costly Probate Administration.

Estate Planning Essentials: Trusts & Probate

Thursday, May 25, 2023 at 6pm

5500 Grossmont Center Dr 5500 Grossmont Center Drive Suite 195 La Mesa, CA 91942

Sign up for our next event HERE!

Finding a Lawyer in San Diego, CA

Everyday people must make decisions.

Some decisions are harder than others. Some decisions are risky, like the decision to start a business. Some decisions are the start of a long, and sometimes difficult journey, like the decision to come and live and work in the United States. Some decisions you want to put off and not have to think about, like the decision to write your will.

Those decisions still need to be made, but it’s important to make the right decision. We’ve all made a hasty decision that ended up costing us something down the road later. Each of the areas I practice in, my clients have to make important decisions that will have lasting effects. I want to help as many people as I can make the best decision for them, with my knowledge and expertise as their guide.

No matter which of the above decisions you need to make, you want to make sure you have someone you trust who can help guide you through them. Each comes with it’s own risks or difficulties, but having a good lawyer on your side decreases those risks and difficulties. You want to be sure that you find a lawyer you know and trust who can lead you through the process of starting a business, getting status in the U.S. or creating the best estate plan for you.

Here are some things to think about when hiring an attorney.

Level of Comfort

Do you feel comfortable with this attorney? You will be sharing information about yourself and your legal issue with your lawyer, so it’s important that you feel comfortable to share. If you’re hesitant to tell anything to an attorney you are speaking with, that could be a barrier in your case.

As lawyers, we need to have all the information we are requesting so we can represent you best. We are acting as your adviser and advocate, and we need you to be comfortable enough to share with us all the information we need in your case. Be sure that you’re comfortable with whoever you choose to work with.

Clear Communication

Be sure that you understand what your attorney is telling you. There can be a lot of confusing terms and ideas in the legal world, but a good attorney should be able to explain the legal concepts that apply to your case in a clear way. If you find yourself confused or unlcear on what is happening, always ask for clarification. If you find that you can’t understand much of what an attorney is saying when you talk to him or her, and they don’t do a good job of clarifying, it might not be a good fit.

Knowledge and Expertise

Make sure the attorney you choose to work with has the right expertise and experience for the legal area you need help with. If the attorney advertises him or herself as a civil rights attorney, don’t call them asking for help in filing for a divorce. That’s not their area of practice. Ask an attorney what areas they specialize in, and if they have any experience with your type of case. If they do practice in the area you need help with, great. If not, ask if they can provide you with a referral to another reputable attorney who can help you.

Pricing

A lot of people make price the deciding factor when it comes to their legal needs. While this is understandable, what people don’t know is that spending less money initially, can end up being very costly later on. While a lot of people choose a more affordable legal subscription service company to handle their case, this is not the best fit for everyone. Only a lawyer can take the facts of your unique case and come up with the best legal solution. This level of attention and advising does come with a higher price tag. But you’ll be saving money in the long run.

For example, in estate planning, the plans I prepare for my clients do require an investment up front. But what they are paying with me helps them shield their family members from paying up to ten times that amount in probate court later on.

If price is a big issue for you, ask the attorney if they charge hourly or a flat fee. Some attorneys may even agree to payment plans. While price is important in choosing your attorney, don’t let it take priority in your search. You could be missing out on great legal advice that will save you a lot of money down the road.

Law Office of Sharyna Scott is here to help you. So welcome to our blog, where you’ll find helpful information on topics related to business, estate planning, and immigration law. Check back often for more updates, and if you need help with a legal issue, call us at (858)375-6674 or email sharyna@scottlawsd.com.