<p>Hi Smart ppl,</p>
<p>When a trust beneficiary inherits a property held in the trust, how is the insurance transferred? The homeowners ins is in trust owners’ name, not the trust’s. Upon death of the trust owner, can the now irrevocable trust carry the homeowners’ policy or does that have to be in a beneficiary’s personal name? TY for your help.</p>
<p>I would think you’d contact the insurance broker, explain the transfer of ownership, send them the trust document which shows you as beneficiary and they would transfer the insurance to you. Not sure if it has to be in your name or not.</p>
<p>Is there a lien against it or is it free and clear?</p>
<p>Hug - I can tell you why the homeowners insurance isn’t in the name of the Trust I manage … no insurance company would insure in the name of the Trust. This can be a particular problem when a house/condo/etc is unoccupied, as quoted rates astronomical … eight times higher in our case. We found a renter pronto!</p>
<p>Thanks Class and and Newhope. Quite helpful info and much appreciated!</p>
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<p>Did the Trust distribute the property to you, or do you get to use the trust asset? If the property was distributed to you, then you get insurance the normal way. The current insurance company is likely to continue the insurance through the current term, but it is up to them if they will continue past the renewal date with you as the new owner.</p>
<p>In any case, you need an insurable interest. As the owner, you clearly have an interest. As a beneficiary, one could argue you have an interest (can’t live there for free if the place burns down).</p>
<p>It’s going to depend on your state. Here a trust can be listed as the owner of a property and the insurance policy would be issued to the trust. I’m not sure why some states would not allow that. It’s really no different than having an insurance policy on a business. If nothing else the trust could be listed as additional insured. </p>
<p>Yes, vacant properties will have a surcharge. You will have to determine if that surcharge is worth being a landlord or not :D.</p>
<p>SteveMA hit upon an important concept - additional insured. Everyone who uses a living trust or any other vehicle (LLC LLP etc.) other than sole ownership or joint tennacy needs to be aware of this concept. Your insurance broker/agent needs to know how title to the insured property is held.</p>
<p>DW and I each have living trusts. Each living trust owns a one-half interest in our home. Our homeowners policy is in our names, but each living trust is a named additional insured. Without this addendum to the policy, claims might not be paid. This is because the trusts own the house - my wife and I don’t own the house, we control trusts that own the house. If the insurance is only in our name, but we don’t technically own the house - where is the insured loss? </p>
<p>There is no additional charge (at least with the two insurance companies I have dealt with - Chubb and Travelers) you just need to inform your insurance broker/agent and make sure you see your trust(s) listed on the policy declaration or separate certificate of additional insured status.</p>
<p>Good trust/estate lawyers inform their clients to immediately contact their insurance agent when deeding property into trusts.</p>
<p>Very interesting. Important and helpful insights. Thank you! The trust is not an additional insured tho the condo has been in trust years now.</p>