Put Your Mortgaged Home in Your Trust

2 Oct 2023 · 1 min

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In this video, Jerry Taylor explains that homeowners can place a mortgaged property into either a revocable or irrevocable trust without triggering the lender’s due‑on‑sale clause. He cites the federal Garn‑St. Germain Act, which prohibits banks from demanding immediate repayment solely because the title is transferred to a trust. Consequently, a revocable trust can be used to keep the home out of probate while the mortgage remains, and an irrevocable trust can be employed to shield the home’s equity from Medicaid eligibility assessments. The advice is presented as a straightforward, legally‑backed option for estate planning and asset protection.

Chapters

Yes, even if your home has a mortgage, you can put it into a trust. I get this question every single day, and this is why you can do it. There is federal law that says a bank cannot enforce their due-on-sale clause just because you put your home into a trust. That means they can't require you to pay off a loan, and the same is true whether it's a revocable or an irrevocable trust. If you'd like to check the law yourself, it's the Garn, G-A-R-N, St. Germain Act. So if you want to put your house into a revocable trust so that it'll pass outside probate, you can, even if you're still paying on the home. If you want to put your home into an irrevocable trust to protect it from Medicaid, you can do that too.