Can a VA loan be put in a trust

My father got a VA loan last year to help my
brother buy a house. My mother who is still
alive and my father have joint title on the
house. My father passed away a few months
ago. What is the best way to put this in a trust
to protect my mom and my brother

Asked on March 16, 2017 under Estate Planning, Alaska

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

A loan cannot be put into a trust, if it was taken out by individuals: it remains their obligation. (In theory, a trust, like an LLC or corporation, could take out a loan, but that is different matter.) If the loan is a mortgage on the property and is not repaid, the lender can foreclose on the house and take it, regardless of whether the home is put into a trust or remains in an individual person's name: an already existing mortgage takes precedence over subsequent transfers of the property and the lender's rights cannot be impaired by putting the property into a trust or otherwise transferring it. The best way to protect against a loan on property is to make sure you pay the loan.


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