At the time you set up your living trust, you probably transferred the title to your home into your trust with the assistance of your attorney. If there was a mortgage on your home, you continued to make the mortgage payments as before. With interest rates fluctuating, you may want to refinance your home. At that point, you may need to get back in touch with the attorney who set up the trust.
During the refinancing process, your lender will choose one of three ways to handle securing the loan against your property. At the start of your negotiations with the lender, you will want to mention that your home is titled in your revocable trust. Asking the lender what documents you will need to provide may save last minute scrambling and/or delays.
In some instances, the lender is willing to lend directly to the trust. They will request a copy of the trust document to review the provisions of the trustees’ ability to borrow.
Possibly the lender will make the loan to the revocable trust, but they may request an attorney opinion letter. The letter will advise the lender that you are the trustee of your revocable trust, and have the authority to borrow money and obligate the trust for repayment of the money.
A third possibility is the lender may not want to lend money to the trust. In this instance you, as the trustee of the trust, will have to deed the property out of your trust, complete the lending transaction and then re-deed the property back into the trust after the loan is recorded in the land records. Often the title company you choose will be able to do this for you. If not, you will want to contact the attorney who set up the trust to handle the preparation and recording of the deeds for you.
When you sell a home that is titled in a revocable living trust you will want to inform your real estate agent, and the title company handling the sale, that your home is titled in your trust. The title company will want to review a copy of the trust document to see that you are the trustee and have the authority to sell the property.
When the title company issues the proceeds check, the check will be written to the living trust. To save time you will want to have an account titled in the living trust in which to deposit the check. If you have set up a family trust, and a portion of your home is titled in the family trust, then at the time you sell the property a portion of the proceeds check will go into the living or survivor’s trust and a portion of the proceeds will go into the family trust.
In conclusion, be sure that you have set aside your estate planning documents. In any of these situations it is important to have a complete copy of your trust document available to provide a copy to the real estate agent, lender or the title company when needed.
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