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Can I Put My House in a Trust if I Have a Mortgage? A Milford Trust Lawyer Explains

Steven Rubin

February 7, 2025

As a Milford, CT trust lawyer, I often hear this question from homeowners who want to protect their assets but worry that their mortgage might stand in the way. The good news? Having a mortgage doesn't prevent you from putting your home in a trust, and the process is typically straightforward.

The Truth About Mortgages and Trusts

First, let's address the biggest concern: No, transferring your home to a trust will not trigger your mortgage's "due on sale" clause. This protection comes from federal law—specifically, the Garn-St. Germain Act—which allows homeowners to transfer their mortgaged property into a living trust without any risk of the lender demanding immediate payment.

Why Consider a Trust for Your Home?

Placing your home in a trust offers several key benefits:

• Avoiding the time-consuming and expensive probate process

• Maintaining privacy in property transfers

• Keeping control of your property while you're alive

• Enabling easier property management if you become incapacitated

The Basic Process

Transferring a mortgaged home to a trust typically involves:

1. Creating the appropriate trust structure

2. Recording a new deed transferring the property to your trust

3. Updating your homeowner's insurance

4. Notifying your mortgage company

While the process is generally straightforward, there are a few important considerations. Some mortgage companies may request trust documentation, and you'll want to ensure your homeowner's insurance properly reflects the trust ownership. If you refinance in the future, some lenders might ask you to temporarily remove the property from the trust during the process.

Getting Professional Help

While placing your home in a trust is a smart estate planning move, it's crucial to do it correctly to avoid future complications. Small mistakes in the process can lead to significant problems down the line, from title issues to tax complications.

As an experienced Milford trust lawyer, I can help you navigate this process smoothly and ensure your home is properly protected for your loved ones. Contact our office at 203-877-7511 to schedule a consultation. Let us help you create a secure future for your family while avoiding common pitfalls in the process.

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