Why You Should Notify Your Home Insurance Company After Transferring Your Home into a Revocable Living Trust
Many homeowners create a revocable living trust as part of their estate planning to ensure a smooth transfer of assets to their heirs. One important but often overlooked step in this process is notifying your home insurance company when you transfer your home into the trust. Failing to do so can lead to unexpected complications and even coverage issues.
Why Does This Matter?
When you place your home in a living trust, you are technically changing the ownership of the property. Even though you still control the trust, the home is now legally owned by the trust rather than by you as an individual. Because of this, your home insurance policy must be updated to reflect the new ownership structure.
If you don’t inform your insurance company, they may not recognize the trust as the properly insured entity in case of a claim. This could cause delays or even result in a denied claim, leaving you financially vulnerable.
How to Notify Your Insurance Company
Updating your home insurance policy after transferring your home into a trust is usually a simple process:
- Contact Your Insurance Provider – Call your home insurance company and inform them that your home is now held in a living trust.
- Provide Trust Documents – The insurance company may ask for a copy of the trust or specific pages that show the trust's name and your role as trustee. The Certificate of Trust and a copy of the Deed should be all that is needed.
- Update the Named Insured – Your policy should list the trust as an additional insured or additional interest to ensure there are no gaps in coverage.
- Verify Coverage – Ask your insurer if any other changes are necessary to maintain full protection for your home.
Benefits of Notifying Your Insurer
By updating your home insurance after transferring your home into a trust, you:
- Ensure Continued Coverage – Your policy remains valid, and claims won’t be questioned due to ownership discrepancies.
- Protect Yourself as Trustee – Since you manage the trust, your name should remain on the policy alongside the trust.
- Avoid Legal Issues – Keeping all documents aligned prevents disputes over property ownership in the event of an insurance claim.
Final Thoughts
A living trust is a great way to manage your estate, but don’t forget to update your home insurance accordingly. Taking this small step will give you peace of mind knowing your home remains fully protected. If you’re unsure, consult your insurance provider or an estate planning attorney at Surratt Law Practice to ensure everything is set up correctly.