Can I place my home into an irrevocable trust if it is mortgaged?

A short time ago my divorce was finalized. I own a home and have a mortgage. I would like to protect this asset as I have my boyfriend and his 2 young children moving into my home. I have been looking into an irrevocable trust. One attorney has told me that it’s extremely difficult to do this if you have a mortgage as the mortgage company may not agree. Another attorney has told me that this is not true and people with mortgages do this quite often. Could someone please tell me if my mortgage will cause an issue?

Asked on September 8, 2011 under Real Estate Law, Colorado

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

You can place your home into a trust as an asset of it without any fear that the lending institution holding the mortgage or trust deed on it will object. For all intents and purposes there is no change in ownership per se by placing one's real property into a trust so as to trigger any due on sales clause in the mortgage or trust deed. Many county recorder/tax assessor offices exempt from reassessment property ransfer from one person into their trust.

One thing you should be concerned about is placing your home into an irrevocable versus a revocable trust. You should consult with an experienced wills and trust attorney as to whether an irrevocable trust versus a revocable trust (which I would suggest) is the better for for you.

Good luck.

 


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