How to remove a home from a Living Trust

[patd21]

What is the name of your state (Texas)?

I am trying to help my mother remove her home from the living trust that my parents created a while back. My father passed away a couple of years ago and my mother now would like to do a reverse mortgage but she needs to remove the home from the living trust. We have done some research online and have found some information but could really use a little guidance. As it sits now if we understood it correctly is that we she needs to amend the trust by writing down exactly what she would like to do and then have that amended section notarized. Here is where we are not sure what to do next or if even this is the correct way to do this. I know it would probably be a lot easier to have an attorney do this but my mother is trying to do it on her own. Any help would be greatly appreciated.

 

[curb1]

Change the title to indicate her name on the title from how it is now titled indicating the trust.

How exactly is the title now written?

 

[tranquility]

I am trying to help my mother remove her home from the living trust that my parents created a while back. My father passed away a couple of years ago and my mother now would like to do a reverse mortgage but she needs to remove the home from the living trust.

Are you sure the home is in the "living trust"? Most trusts are written to devolve into an A *and* a B trust on the death of one. It was de rigeur a few years ago, because of the usual life estate granted to the spouse on the death of the other spouse, to put the home into the B trust and the more liquid assets in the A. This gave the surviving spouse the most flexibility by keeping the estate's money and by having the irrevocable trust pay the house tab.

I don't know if that is what happened here. But, I do know something more than what the OP has written so far is in play. (Absent a complete lack of funding of the B trust.)

I know it would probably be a lot easier to have an attorney do this but my mother is trying to do it on her own.

Go the "easier" route. You don't want to mess with title issues on your own.

 

[patd21]

Right now the title is written as a "Special Warranty Deed" and in the deed it clearly states that the property is in the trust. In the trust the property is not listed, it states that to list all properties on Schedule A but it never was.

 

[LdiJ]

Right now the title is written as a "Special Warranty Deed" and in the deed it clearly states that the property is in the trust. In the trust the property is not listed, it states that to list all properties on Schedule A but it never was.

Real estate does not actually have to be removed from a trust in order to be refinanced or to obtain a reverse mortgage. You just need the signature of the trustee at closing. Who is the trustee?

 

[tranquility]

Lenders can choose to not lend to a trust. It is fairly standard here in CA for a lender to demand the property be removed. (And, a source of work for attorneys in Heggstad petitions when the property is inadvertently not transferred back in. In fact, the source case, Estate of Heggstad, had this exact issue.) I don't know why the banks require it as I don't see how their rights change, but they still do. (There is a question as to if a quit claim deed would sever the covenants of the owner's original title policy.)

But, I'm still not sure the trust is completely revocable at this time. (aka living trust) One spouse has died. Texas is a community property state. There could be other issues, including if it is even possible.

 

[LdiJ]

Lenders can choose to not lend to a trust. It is fairly standard here in CA for a lender to demand the property be removed. (And, a source of work for attorneys in Heggstad petitions when the property is inadvertently not transferred back in. In fact, the source case, Estate of Heggstad, had this exact issue.) I don't know why the banks require it as I don't see how their rights change, but they still do. (There is a question as to if a quit claim deed would sever the covenants of the owner's original title policy.)

But, I'm still not sure the trust is completely revocable at this time. (aka living trust) One spouse has died. Texas is a community property state. There could be other issues, including if it is even possible.

Interesting informaton. I have been involved (family members) with refinancing and reverse mortgages of properties in trusts and had never encountered a bank that would not lend in that instance. That is good information to know.

 

[patd21]

Real estate does not actually have to be removed from a trust in order to be refinanced or to obtain a reverse mortgage. You just need the signature of the trustee at closing. Who is the trustee?

Trustee is my mother, in the trust it does say that in the event that one of the spouses passes before the other the surviving spouse is in control. The lender is in California and did say that before they could proceed with the reverse mortgage that the home would have to be removed from the trust.

 

[justalayman]

As tranquility stated, the information here is incomplete so it cannot be determined if she can remove the house from the trust. Mom needs to speak with a lawyer.

 

[curb1]

The language in the trust should indicate whether, or not, she can take the house out of the trust. If the only reason is to get a reverse mortgage, ask the institution to see if she needs to remove the house first.