Conveying real estate into a Revocable Trust or a so-called Nominee or Realty Trust is a common aspect of the estate planning process for people who own real property.  Property owned in trust avoids probate which reduces time, cost and aggravation for surviving family members.  In addition to probate avoidance, titling real estate in trust is often a vital part of estate tax savings planning undertaken by married couples.   

However, if you decide to obtain a mortgage or Home Equity Line of Credit (HELOC) on property titled in the name of your Trust, or refinance an existing mortgage, be aware that many banks and mortgage lenders require that the property be removed from the Trust for the loan closing.  The property may be conveyed back into the Trust following the completion of the loan transaction.  There is a federal law (the Garn-St. Germain Depository Institutions Act) that prohibits a lender from exercising the due on sale clause under a mortgage for certain types of transfers, specifically including the transfer of property to a trust of which the borrower is a beneficiary.  

When your property is titled in a Revocable Trust (or in a Nominee or Realty Trust which names you or your Revocable Trusts as the beneficiary) there is no impact on your estate plan to remove and then re-convey the property to the Trust. Note that this is NOT the case for property held in an IRREVOCABLE Trust. 

We are happy to prepare the deed and related documentation to remove property from your Trust and re-convey it to the Trust once the mortgage transaction is complete.  Our typical legal fee for this service is $550 per property.  In addition, there will be recording charges to the Registry of Deeds.  

Please contact our office if you are obtaining a mortgage or HELOC, or refinancing an existing mortgage and your lender requires that your property be removed from your Trust in order to complete the loan transaction.