Is Your Home in a Trust?

As an estate and tax planning tool, many successful individuals and families establish trusts, and transfer ownership of certain assets to the trust. Depending on the type of trust, benefits can include:

• Avoiding a lengthy probate process
• Reducing taxes
• Protecting assets from creditors and claims

Homes are often the largest assets held in trust. When you transfer the deed to your trust, be sure to check-in with your agent. There are implications for homeowner’s insurance for your trust-owned home, even if you are the creator of the trust, the trustee of the trust, and reside in the home.

How Does This Affect Your Homeowner’s Insurance Policy?

Insurance policies are agreements with specifically defined terms. “Insured” typically means you, your spouse, and resident family members. When you place your home in a trust, the trust owns the home. As a result, you must address the trust’s interest, and your personal coverage. If parties to the agreement are not correctly listed, this could complicate, or possibly negate, coverage in the event of a loss.

Have You Talked with Your Agent?

Be sure to connect with your agent when there are any changes to the deeded owner of your home. This will help ensure you have the coverage you expect when you need it.

Typically, you can add the trust to your personal homeowner’s policy as an additional insured, much like you would add a bank that holds your mortgage. You’ll need to provide documentation and information about the trust to make sure this is the correct action. If the trust is a business enterprise, however, other remedies, such as separate commercial and personal coverage, may be needed.

Please reach out if you have any questions about homeowner’s insurance for your trust-owned home. Our experienced team members are ready to assist. Thank you.