How to Put House in Trust with Mortgage in California: A Simple Guide

Hey there! So, you’re thinking about putting your house in a trust in California, but you’ve got a mortgage, and you’re like, “Uh, can I even do that?” I’ve been digging into this stuff to help my family plan for the future, so let’s chat about it like we’re just hanging out.

By the end, you’ll know exactly how to put a house in a trust with a mortgage in California, why it’s a cool idea, and how to make it happen without any headaches. Let’s dive in! 😎

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Quick Guide to Putting a House in a Trust with a Mortgage in California

1. Create a revocable living trust with a trust document.
2. Prepare a grant or quitclaim deed to transfer the house to the trust.
3. Sign the deed with a notary and file it with the county recorder, along with a Preliminary Change of Ownership Report.
4. Notify your mortgage lender to avoid triggering the due-on-sale clause (protected by the Garn-St. Germain Act).
5. Update your homeowner’s insurance to list the trust as the owner.
6. Continue making mortgage payments through the trust or personally.

This process avoids probate, ensures privacy, and keeps you in control. Consult an estate planning lawyer for best results.

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Why Put Your House in a Trust? 🤔

Okay, imagine you’ve got this awesome house—your family’s home base. A trust is like a special box where you can put your house to keep it safe and make sure it goes to the right people (like your kids or family) when you’re not around anymore.

It’s a way to plan ahead so your family doesn’t have to deal with a messy, expensive court process called probate.

Probate is like a super long board game nobody wants to play it can take months and cost a ton of money (think $40,000 or more in California!).

Here’s why a trust is awesome:

• No Probate Drama: Your house goes straight to your family without court nonsense.
• Privacy Vibes: Unlike a will, a trust keeps your business out of the public eye. Nobody needs to know who got your house.
• You Stay in Control: With a revocable trust (the most popular kind), you can still make changes or even cancel it if you change your mind.
• Plan for the Future: You can decide exactly when and how your house goes to your family—like, “Give it to my kid when they’re 25 and not blowing cash on video games.”

But what if you’ve got a mortgage? Can you still do this? Yup, you totally can! The mortgage just means you owe money on the house, but it doesn’t stop you from putting it in a trust. You just need to be careful about a few things, and I’ll show you how.

Also Read: Traceloans.com Mortgage Loans Review

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Can You Put a House with a Mortgage in a Trust in California? 🏠

Short answer: Yes! You can put a house with a mortgage into a trust in California, and it’s super common. The mortgage stays with the house, so you (or the trust) still have to keep making those payments. The cool thing? There’s a law called the Garn-St. Germain Act that protects you. It says your lender can’t freak out and demand you pay the whole mortgage just because you moved the house into a trust (as long as you’re still a beneficiary of the trust). Phew! 😅

But you gotta be smart about it. Some lenders might get picky, and you don’t want any surprises. Let’s go through the steps to make this as smooth as your favorite playlist.

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Step-by-Step: How to Put Your House in a Trust with a Mortgage in California 🚀

Here’s the game plan to get your house into a trust, even with a mortgage. Think of it like following a recipe for your favorite tacos—simple steps, awesome results.

Step 1: Pick Your Trust Type 🌟

First, you need to create a trust. There are two main types:

• Revocable Trust: You can change or cancel it anytime. Most people pick this because it’s flexible, like being able to switch up your Netflix queue.
• Irrevocable Trust: This one’s locked in—you can’t change it without a big hassle. It’s great for protecting stuff from creditors, but most folks stick with revocable for their house.

For most people, a revocable living trust is the way to go. You can be the trustee (the boss of the trust) and keep control of your house while you’re alive.

Step 2: Set Up the Trust 📝

This is where you make the trust official. You’ll need a trust document that says:

• Who’s the trustee (probably you).
• Who’s the successor trustee (the person who takes over if you can’t manage the trust anymore, like if you pass away).
• Who gets the house (your beneficiaries, like your kids or family).
• Any special rules, like “Give the house to my daughter when she’s 30.”

You can do this yourself with online tools like GetDynasty or FreeWill, but I’d recommend talking to a lawyer to make sure it’s legit. It’s like getting a pro to fix your phone screen—worth it to avoid cracks! Expect to pay $500–$2,000 for a lawyer in California.

Step 3: Transfer the House to the Trust 🏡

Now, you need to officially move your house into the trust. This is called funding the trust. Here’s how:

1. Get a New Deed: You need a grant deed or quitclaim deed that says the house now belongs to the trust. You can get these from your county recorder’s office or online.
2. Fill It Out: Write your name as the grantor (the current owner) and the trust as the grantee (the new owner). For example: “John Doe, as Trustee of the John Doe Living Trust.”
3. Sign with a Notary: Take the deed to a notary public (like at a bank or UPS store) to make it official.
4. File the Deed: Go to your county recorder’s office and file the deed. You’ll also need to file a Preliminary Change of Ownership Report (PCOR) to let the county know the house moved to your trust. This keeps your property taxes from going up. Filing fees are usually $10–$100, depending on the county.

Step 4: Talk to Your Lender 💬

This is super important! You need to tell your mortgage lender you’re putting the house in a trust. Why? Some mortgage contracts have a due-on-sale clause that says if you transfer the house, they can demand you pay the whole loan right away. But the Garn-St. Germain Act says they can’t do that if you’re transferring to a revocable trust where you’re still a beneficiary. Still, it’s smart to:

• Send your lender a copy of the trust document and the new deed.
• Ask them to update their records so the mortgage is in the trust’s name.

If you don’t tell them, they might get confused and cause problems later. It’s like telling your teacher you changed your name—keeps everyone on the same page.

Step 5: Update Your Insurance 🛡️

Call your homeowner’s insurance company and let them know the house is now in a trust. They’ll update the policy to list the trust as the owner. This makes sure your house is still covered if something like a fire happens.

Step 6: Keep Making Mortgage Payments 💸

The mortgage doesn’t go away just because the house is in a trust. The trustee (probably you) is responsible for paying it. You can use money from the trust’s bank account or your own—it’s all good as long as the payments get made.

Here’s a quick table to sum it up:

Step	What to Do	Why It Matters
Pick a Trust	Choose revocable or irrevocable	Sets the rules for your house
Set Up Trust	Create a trust document	Makes the trust official
Transfer House	File a new deed	Puts the house in the trust
Notify Lender	Tell your mortgage company	Avoids due-on-sale issues
Update Insurance	Update your policy	Keeps your house protected
Pay Mortgage	Keep making payments	Keeps the bank happy

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What If You Want to Refinance or Sell? 🤷‍♂️

Good news—you can still refinance or sell your house even if it’s in a trust! Here’s the deal:

• Refinancing: Some lenders don’t love refinancing a house in a trust. If they give you trouble, you can temporarily transfer the house back to your name, refinance, then put it back in the trust. It’s a bit of a hassle, but it works.
• Selling: You (or the trustee) can sell the house just like normal. The money from the sale goes into the trust, and you can decide what to do with it (like give it to your beneficiaries).

Just check with your lender first to make sure there are no surprises.

Also Read: First Federal Credit Union Mortgage Rates Review

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Pros and Cons of Putting Your House in a Trust ⚖️

Let’s break it down like we’re picking a new game to play—what’s good, and what’s not?

Pros 😄

• Saves Time and Money: No probate means your family gets the house faster and cheaper.
• Keeps It Private: Nobody but your family needs to know who got the house.
• You’re Still the Boss: With a revocable trust, you can change things up anytime.
• Plans for “What If”: If you can’t manage the house anymore (like if you get sick), your successor trustee steps in.

Cons 😕

• Costs a Bit: Setting up a trust and filing deeds costs money (maybe $500–$2,000 with a lawyer).
• Takes Some Work: You gotta file paperwork and talk to your lender and insurance company.
• No Creditor Protection: A revocable trust doesn’t protect your house from creditors while you’re alive.

Also Read: SchoolsFirst Credit Union Mortgage Review

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Final Thoughts: Why This Is Worth It 💭

Yo, putting your house in a trust with a mortgage in California is like setting up a cheat code for your family’s future.

It skips the probate hassle, keeps your business private, and lets you call the shots while you’re still around.

Yeah, it takes a little work and some cash upfront, but it’s way cheaper than probate fees down the road.

Plus, you’re making sure your house goes exactly where you want it—like passing the controller to your favorite player. Talk to a lawyer, follow the steps, and you’re golden. You got this! 🙌

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Also Read: Compu Link Corporation Reverse Mortgage Guide

Top 5 FAQs About Putting a House in a Trust with a Mortgage in California ❓