Great information. If one wants to sell their home that is presently in a Revocable Living Trust, should the home first be taken out of the trust and put back into the personal name before selling? If so, what is the process of getting the home out of the Trust name? Thanks
Technically, No. However, there are lenders that will not finance the purchase of home if it is in or has ever been in a trust of any kind despite state statutes saying it is OK. I recently ran into this issue on a construction loan. The first lender initially preapproved us but when they found out the land, we owned was in a revocable trust they would not touch it even if we did take it out of the trust. The second lender did give us final approval, but it was conditional to have the land taken out of the trust. This was from the purchasing end and was a huge headache to deal with right out the gate. From a seller's standpoint if your house is in a revocable trust, you could effectively limit your potential buyers. Thís is the Delima I am currently facing when our new home is complete, and we go to sell our current home, I know one major local lender that will not finance it, the one that denied us. I believe the issue the lenders have is that when the property is in the trust and now there are additional beneficiaries listed beyond the trustees that these beneficiaries could have a claim on the property in the event of foreclosures, even though the law says otherwise.
@@thefarrelllawfirm Provided the Buyer's lender will finance the property being sold from the Trust. There are lenders that will not. This was my experience last year while applying for Construction to Perm Mortgage to build a home on my own land. The first lender (which we had been members for over 20 years) gave preapproval, but pulled the plug once they found out the land deed was in our revocable trust. I advised this lender of the state statutes concerning revocable trusts as well as offered to take it out of the trust. I could and would easily take it out of the trust and they would not budge. After lengthy correspondence with the lender and my lawyer the lender’s final response was; "our policy is that we DO NOT allow life estates or ladybird deeds. I do know that these are separate entities when it comes to how they are handled, however, our policy does not allow either of these. We don’t allow exceptions, nor do we allow any lending to occur if it has changed, i.e., if you took it out of the life estate/ladybird." This was cut and pasted from my final correspondence with this lender. We were able to find another lender, got approved and are awaiting county approval of the building permit. However, we still had to take the land out of the Trust. This whole trust SNAFU caused use to lose four months in getting this project going. Even though the laws dictate what you can and cannot do with a Trust. They do not dictate what a lender will and will not do to pay for it.
That's a good question, but nothing can really help you from someone falsifying a deed and filing it at the Courthouse. Fortunately, deed theft isn't as prevalent as people might think.
If you are on a deed with a sibling, then you own property with your sibling. But, property is interesting in that you could put your share of the property into your own Trust.
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John, would this be something to look at for James and I?
Great information. If one wants to sell their home that is presently in a Revocable Living Trust, should the home first be taken out of the trust and put back into the personal name before selling? If so, what is the process of getting the home out of the Trust name? Thanks
Technically, No. However, there are lenders that will not finance the purchase of home if it is in or has ever been in a trust of any kind despite state statutes saying it is OK. I recently ran into this issue on a construction loan. The first lender initially preapproved us but when they found out the land, we owned was in a revocable trust they would not touch it even if we did take it out of the trust. The second lender did give us final approval, but it was conditional to have the land taken out of the trust. This was from the purchasing end and was a huge headache to deal with right out the gate.
From a seller's standpoint if your house is in a revocable trust, you could effectively limit your potential buyers. Thís is the Delima I am currently facing when our new home is complete, and we go to sell our current home, I know one major local lender that will not finance it, the one that denied us. I believe the issue the lenders have is that when the property is in the trust and now there are additional beneficiaries listed beyond the trustees that these beneficiaries could have a claim on the property in the event of foreclosures, even though the law says otherwise.
No, you can sell the home right out of the Revocable Living Trust without transferring it to your individual name first.
@@thefarrelllawfirm Provided the Buyer's lender will finance the property being sold from the Trust. There are lenders that will not. This was my experience last year while applying for Construction to Perm Mortgage to build a home on my own land. The first lender (which we had been members for over 20 years) gave preapproval, but pulled the plug once they found out the land deed was in our revocable trust. I advised this lender of the state statutes concerning revocable trusts as well as offered to take it out of the trust. I could and would easily take it out of the trust and they would not budge. After lengthy correspondence with the lender and my lawyer the lender’s final response was;
"our policy is that we DO NOT allow life estates or ladybird deeds. I do know that these are separate entities when it comes to how they are handled, however, our policy does not allow either of these. We don’t allow exceptions, nor do we allow any lending to occur if it has changed, i.e., if you took it out of the life estate/ladybird."
This was cut and pasted from my final correspondence with this lender.
We were able to find another lender, got approved and are awaiting county approval of the building permit. However, we still had to take the land out of the Trust.
This whole trust SNAFU caused use to lose four months in getting this project going.
Even though the laws dictate what you can and cannot do with a Trust. They do not dictate what a lender will and will not do to pay for it.
If you pay off the mortgage, would a revocable trust protect the property deed from deed theft which is happening more frequently in Georgia?
That's a good question, but nothing can really help you from someone falsifying a deed and filing it at the Courthouse. Fortunately, deed theft isn't as prevalent as people might think.
Thanks for the info, also Wit with a straight face. "Put you to sleep"
My pleasure. I try not to take myself too seriously.
I've heard that there are potential issues with the lender if you change the legal owner of the property (transfer it into a trust). Is this an issue?
It is not an issue as long as you're transferring into a Revocable Living Trust where you are the beneficiary.
what if your on a deed with a sibling?
If you are on a deed with a sibling, then you own property with your sibling. But, property is interesting in that you could put your share of the property into your own Trust.
GA school tax exemption for elderly, no wonder people rail against (us) "boomers". Poor elderly exemption wouldn’t be so alienating.