There are a myriad of trusts serving just as many purposes and strategies. One of the most popular and frequently asked about of the trusts is the revocable living trust as an estate plan vehicle. The revocable living trust can be beneficial for those concerned with avoiding probate. They may also be a good option for blended families. The establishment of a trust by an experienced attorney is only the first step in utilizing your trust. The trust must be funded. Your attorney can advise you as to how to properly title assets in the name of your trust.
One of the most common steps in titling assets is to convey your real estate to the trust. When the property is not fully paid off and is still subject to a mortgage, some banks or lenders may object or even refuse their customers from re-titling property to their trusts. However, federal law, known as the Garn-St. Germain Act protects transfers to living trusts for estate planning purposes, as long as the borrower is a beneficiary of the trust with ongoing right to occupy the property. Note, that this does not provide the same protection for placing your property into an LLC or other entity.
If you are experiencing difficulty with your lending institution stating that you are in default of your loan, or threatening to accelerate your debt, simply because you transfer your real estate into your living trust, call us for further guidance and assistance with protecting your property and your rights under federal law.
