How Does Refinancing Your Home Happen When Your Home is in a Trust?

As you move forward with refinancing your home, I want to explain how this process typically interacts with your revocable living trust and what steps may be required to ensure your trust remains properly funded.

1. Temporary Transfer Out of Trust

Most lenders require that the title to your home be temporarily transferred out of your trust and back into your individual name in order to complete the refinance. This is a standard procedure used to simplify the underwriting and loan documentation process.

2. Completing the Refinance

Once the refinance is complete and the new loan is finalized, the lender will record a new Deed of Trust (the mortgage). At that point, your ownership will still show as an individual, not as your trust.

3. Transferring Title Back to the Trust

To maintain the integrity and benefits of your estate plan, it’s essential that the finance company prepare and record a new deed transferring title of the property back into your trust. If this step is skipped, the home will not be governed by the terms of your trust, which could complicate matters in the event of your incapacity or death. You should insist that this step is completed by the refinance company.

Next Steps

Please let me know once your refinance has closed. At that time, I will prepare the deed to transfer the property back into your trust and ensure it is properly recorded with the county, IF the finance company has not.

Let me know if you have any questions or would like to schedule a quick call to go over this in more detail.