<p>Has anyone done it ? Would it be a problem with the bank who holds the mortgage ?</p>
<p>You need to contact an attorney who specializes in trusts. That person can answer your questions. My understanding is that when you put a property into a trust, the TRUST then is the owner of the property and the beneficiaries are named as well. I’m not sure an individual can continue to hold the mortgage on a property that is being put into a trust. The TRUST would need to hold that mortgage and seems to me that means that the trustees would be the new mortgage holders. We have a family property that was put into trust and ALL debts related to it (including the mortgage) were paid in full BEFORE the property was transfered to the trust. </p>
<p>Setting up a trust for property is not all that wonderful (been there…done that). There are issues with how the trustees will manage the property, issues with IF this assets of the trust can be used or dismantled, issues with property use, etc.</p>
<p>You really do need to see a lawyer…really. Also…trust guidelines are slightly different from state to state so any advice you receive here may or may not be applicable in YOUR state.</p>
<p>Quick answer is yes, my spouse and I put our real estate assets into a living trust that is revocable. It was not a problem with the mortgage company. They have no idea it was done actually. Doing so did not violate the terms of our mortgage agreement because the property was not sold. The legal ownership was transferred only. The ownership of a property (deed) and the mortgagee are distinct legal records. </p>
<p>Again though, mortgages vary, as do state laws concerning trusts. You need a lawyer.</p>
<p>I asked my mortgage broker (Wells Fargo) in Cali and I was told there would not be any issues from the bank on a new sale and my loan was preapproved. </p>
<p>When I lived in Chicago I consulted a lawyer who specialized in trusts and this issue about the banks objecting never came up. We did do it at the time because we have a few houses and they are in different states and a different lawyer need to be involved in each state. It was just too complicated at that time and frankly, not worth the expenses for the perceived benefits. </p>
<p>I ask because one of my friends said their banks would not allow it. Here is what she said</p>
<p>"…not state laws. Bank Rules. When we met with our lawyer, they told us that in order to place our houses in trusts (living trusts) we needed the bank’s permission in order to do so - or the bank could call the loan if found out and chose to do so.</p>
<p>So we contacted each mortgage company, asked directly, and each said no, it was against their rules to allow a transfer to a trust (unless it was your primary residence) - because in essence, that was allowing the legal sale of the property to another entity without canceling the loan. So their original loan - contracted with us - would now be with the trust.</p>
<p>The very reason you want to put a house in trust - to protect it from lawsuits and creditors - is the very reason the banks said no.</p>
<p>I don’t know what to tell you. We sought legal counsel, we acted on the counsel we received, we received letters from each bank saying no…before you go on hearsay, I would find out FOR SURE by calling the bank (not the guy brokering the loan) and ask as Joe Schmoe and see what they say."</p>
<p>Can somebody offer reasons/advantages of putting one’s house in a trust?</p>
<p>^avoid probate - therefore preserving some privacy.</p>
<p>Minimize estate taxes if it applies.</p>
<p>Protection of assets. At work recently 2 of my co-workers had to put parents into nursing homes. One parent had deeded the home to her son with lifetime rights of tenancy so the home was protected. The other parent did not so the home basically will be used to pay the nursing home. The is some unspoken friction between these co-workers now.</p>
<p>Putting a home in trust protects the home as an asset.</p>