At Liberty Law Idaho, we often recommend that clients include a Trust as a key component of their overall Estate Plan. Like a Will, a Trust helps distribute your assets after death—but it also provides valuable benefits while you’re still alive, particularly in how your assets are managed and protected.

Can You Transfer a Mortgaged Home Into a Trust?

Yes, you can! Many people assume that a mortgage prevents transferring property into a Trust, but that’s not the case. Even with a mortgage, your home can be placed into a Trust—though there are a few important considerations.

What Is a Trust?

A Trust is a legal arrangement where property is held by one party (the Trustee) for the benefit of another (the Beneficiary). You, as the Grantor, transfer assets into the Trust—essentially placing them into a legal "bucket.” If your Trust is revocable, you retain full control and can manage, modify, or even dissolve the Trust at any time during your lifetime. Typically, the Trust becomes irrevocable upon your death or your spouse’s death unless otherwise specified.

Mortgages and Title Transfers

When you own a home with a mortgage, the lender maintains a lien on the property. That means they have certain rights, such as requiring ongoing mortgage payments, up-to-date property taxes, and adequate homeowners insurance. Transferring your home into a Trust may involve notifying your lender and completing some extra paperwork—but it’s generally a routine step, and many mortgage agreements already accommodate this.

Lenders are mostly concerned with protecting their interest in the property. A transfer to a Trust isn’t a sale or gift, so it’s usually allowed. That said, lenders may require compliance with specific guidelines—such as those issued by Fannie Mae—when approving such transfers.

Refinancing a Home That’s in a Trust

If you choose to refinance your mortgage after the property is in a Trust, it’s still possible. Some lenders may ask that the home be temporarily removed from the Trust during the refinancing process. With a revocable Trust, this is easy to do, and once refinancing is complete, the property can be retitled back into the Trust.

How Liberty Law Idaho Can Help

At Liberty Law Idaho, we help our clients properly fund their Trusts and make sure all asset transfers are handled correctly. Whether you’re thinking about putting your home or other assets into a Trust, we’re here to guide you through each legal step and coordinate with your lender to ensure compliance with applicable rules.

If you’re ready to set up a Trust or build a comprehensive Estate Plan, contact Liberty Law Idaho today—we’re ready to help.