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The Heritage Law Center, LLC Blog

Protecting Your Home When It’s in a Trust

POSTED ON: September 4, 2018

Sometimes people put their homes into a trust as part of their overall estate plan, which can be a great tactic for many reasons. However, you have to keep in mind that this can cause some issues in regard to insuring your home. Most insurance companies will still insure your home completely, but you have to take action to make sure they do.

When you have a home insurance policy, in the event of loss it will pay anyone listed on the policy. Let’s say your home isn’t in a trust; how does home insurance work? If you own the home and your name is on the policy, in the event of a loss you’ll be paid for your personal property and the value of the home. If you put your home in a trust and you’re not a trustee, the trust is what now owns the home. The name of the trust has to be listed on the policy, so in the event of loss the value of the house will be paid to the trust. It’s up to you to contact your insurance company and make sure the name of the trust is included on the policy.

You might also choose to transfer your home into a trust and become tenants in that home. This is called a qualified personal residence trust in which you are granted the right to live in the home, but the ownership structure can be a little different than a living trust.

The best thing to do is to talk to your attorney and insurance company. As trusts have become more common for homeowners, many insurance companies have adjusted their policies to accommodate these situations. If your insurance company isn’t willing to do what is necessary to ensure that your home is covered, you might choose to find a different insurance company.

We’re here to help you create the estate plan that’s best for you and your family. We’ll talk to you about your specific situation, and then make recommendations to suit your needs. We’ll also use our knowledge and expertise to guide you to take the necessary steps to protect your assets. Call us today at 617.299.6976 or send an email to mkarr@maheritagelawcenter.com to schedule a confidential, no-cost consultation.