What are the consequences of taking a house out of a trust?

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What are the consequences of taking a house out of a trust?

My in-laws past away recently and it seems they removed their house from the trust a few years ago to refinance but never put it back in. I assume the house will go to probate now but are the belongings inside the house still covered by the trust? Can we divide the assets inside per the trust even if the house was removed from it?

Asked on January 30, 2011 under Estate Planning, California

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I am so sorry for your losses.  So they re-deeded the property back to themselves, refinanced and never then deeded it back to the trust? You need to take this to an estate attorney to review.  The law in your state (and possibly the case law that interprets the law rather than the actual statutes themselves) will govern how the courts will look at this matter.  Is there a last Will and Testament as well?  Sometimes the Will has what is known as a "pour over" provision that "pours" property left out of the trust in to the trust at the death of the testator.  It has to be viewed in totality.  As for the dividing the contents I would really wait until probate is completed and this is figured out. Good luck.  


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