Trusts and the Problem of Refinancing Your Home

If you are a homeowner with an estate plan that includes a revocable living trust, you likely intended for your house to go into the trust. Then, when you die, your house will transfer without the need for probate.

BUT - if you have refinanced your house after your estate plan was created, did you remember to put the house back in the trust?

If your house was in the trust before you refinanced, you would have had to pull the house out of the trust before getting your new mortgage. If you did not re-transfer the property back into the trust, then the house will still be subject to probate when you die. Probate is not necessarily a bad thing, but if the primary purpose of the trust was to avoid it, and then you take the assets out of the trust, you wasted your money.

Revocable trusts require regular review. The trust does you no good if you take assets out or forget to put some in.