Holding Your Home in a Trust or LLC
As your financial life matures, you may want to hold your home in a trust for estate planning, or an LLC for an investment property. Both interact with your mortgage, and both are very workable with a little planning.
A living trust for your home
Many homeowners place their primary residence in a revocable living trust so it passes to heirs without probate. Federal protections generally allow transferring your home into your own living trust without triggering the loan’s due-on-sale clause, so it usually does not disturb your existing mortgage. It is one of the most common and sensible estate-planning moves.
An LLC for investment property
Real estate investors often hold rentals in an LLC for liability protection. Financing property in an entity is very doable — DSCR loans are commonly built to close in an LLC — though the available programs and terms differ from a loan in your personal name. If you plan to hold in an entity, say so up front so the loan is structured for it.
Talk to us — and your estate or tax advisor — before you transfer a property into a trust or LLC, especially if a loan is involved. The sequencing matters, and doing it in the right order avoids any friction with your mortgage.