Ben10 wrote: ↑
Mon Jun 25, 2018 5:40 am
Add your trust as an alternate payee under the policy.
I believe that a lot of folks struggle with semantics in this realm. In the scenario where a married couple has transferred ownership to their revocable living trust:
a) The husband and wife still need to be listed as the named insured for various reasons, especially so that they benefit from the liability protections
b) The trust, as owner of the house, needs to be named in the policy as an additional "party" having an interest in the property. I believe this is similar to how a mortgage holder is listed. Ben10 calls this an "alternate payee," and I believe that means the same thing. If the trust owns the home, but is not listed in the policy, there is a grey area regarding who is entitled to insurance payments when the house burns down. I've read that if the named insured (husband and wife) are also the current trustees, that fills in the gap. I would still insist upon seeing my trust named right on the homeowners insurance policy. The trust also needs to be listed so that if somebody is injured on the property and sues the owner (i.e. the trust), there is liability coverage.
Also, if the trust owns the home, I absolutely believe it needs to be specifically listed in any umbrella policy. I've seen umbrella policies that specifically list the individuals as named insured with an additional field for "trust name."
If I had an insurance agent who couldn't give a rapid, concise, clear answer to all of this, I would find a new agent/company.
I know of at least one attorney whose homework assignment for a person establishing a new trust lists "call your insurance agent" as the top task, even before "change ownership on your bank and brokerage accounts."
(please see my signature and note that I am also not an insurance agent)
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.