House that was in trust is actually in estate

[Determined]

I am venting about a frustrating situation that I just discovered. My father had cancer and died in 2014. He and my mom took care of a lot of things, and most everything was moved into a trust in my mom's name.

Mom died unexpectedly last year. We are selling her Florida home and have a buyer. I am the trustee and executor, and I live in Ohio.

Probate was already filled and closed. Today I get a call from the title company in Florida saying the deed is in my mom's name, not her trust. Apparently when they refinanced the house in 2013, she took it out off the trust and never put it back in. Our lawyer had it listed as a trust asset. The mortgage is in the name of the trust. What a pain! I already talked to our lawyer. I will be in FL in two weeks, so hope we can get this straightened out. If it is in the estate, her will says it has to go to trust. Aghh!

[shawndoggy]

Why out of trust for refi if mortgage is in the name of the trust?

[david]

I am venting about a frustrating situation that I just discovered. My father had cancer and died in 2014. He and my mom took care of a lot of things, and most everything was moved into a trust in my mom's name.

Mom died unexpectedly last year. We are selling her Florida home and have a buyer. I am the trustee and executor, and I live in Ohio.

Probate was already filled and closed. Today I get a call from the title company in Florida saying the deed is in my mom's name, not her trust. Apparently when they refinanced the house in 2013, she took it out off the trust and never put it back in. Our lawyer had it listed as a trust asset. The mortgage is in the name of the trust. What a pain! I already talked to our lawyer. I will be in FL in two weeks, so hope we can get this straightened out. If it is in the estate, her will says it has to go to trust. Aghh!

My grandfather recently passed away. His home's title was never changed to be an asset of the trust. I am not sure what the attorney that worked with them on it was smoking--since I would have assumed was the point of the trust. So they need to go through probate with his home. It's really dumb.

[riverguy]

First of all why would you not check title on everything before going through probate? So easy to check on surface real property on county assessor sites.

Don’t know FL laws but some states you would be able to just file will, order admitting to probate and the final order and that would be sufficient to transfer title to the trust. Then proceed with your sale.

[bsteiner]

I am venting about a frustrating situation that I just discovered. My father had cancer and died in 2014. He and my mom took care of a lot of things, and most everything was moved into a trust in my mom's name.

Mom died unexpectedly last year. We are selling her Florida home and have a buyer. I am the trustee and executor, and I live in Ohio.

Probate was already filled and closed. Today I get a call from the title company in Florida saying the deed is in my mom's name, not her trust. Apparently when they refinanced the house in 2013, she took it out off the trust and never put it back in. Our lawyer had it listed as a trust asset. The mortgage is in the name of the trust. What a pain! I already talked to our lawyer. I will be in FL in two weeks, so hope we can get this straightened out. If it is in the estate, her will says it has to go to trust. Aghh!

In Florida, if her home was her principal residence, it's not a probate asset. Assuming she wasn't survived by a spouse or minor child, it passed by operation of law to the residuary beneficiary, in this case the trust. McKean v. Warburton, 909 So. 2d 341 (Fla. 2005): https://scholar.google.com/scholar_case ... s_sdt=6,33.

Unlike some states, probating a Will in Florida (which you apparently did anyway) is not particularly difficult, expensive or burdensome. Why did your mother create a trust for herself?

[Determined]

My dad had a business and they had condo in Ohio where I am. The condo and a few other things went through probate here. The business was in a trust in his name. Everything else was put in her name.

The attorney already had a list of what was isupposedly in trust. He had no idea or reason to think they had taken it out of trust. The trust on her name was set up knowing that my dad would not survive the cancer. I think it was an oversight on her part, and my dad wasn't always thinking straight so may not have noticed.

[Determined]

Why out of trust for refi if mortgage is in the name of the trust?

We don't know. It's what the title person told me who is handling stuff in Florida for the buyer. It's a private sale.

[mouses]

If it is in the estate, her will says it has to go to trust. Aghh!

Well, then, it is in the trust. Show the will to the title company. My will has a provision like this, anything I own that is not in the trust when I die, goes into the trust.

You do not have a problem.

[Determined]

If it is in the estate, her will says it has to go to trust. Aghh!

Well, then, it is in the trust. Show the will to the title company. My will has a provision like this, anything I own that is not in the trust when I die, goes into the trust.

You do not have a problem.

Thanks.

I already put the title company in contact with our lawyer. I know it will get worked out, and the buyers are not going to change their mind. It's just aggravating.

[mouses]

I think I know why your Mom moved it out of the trust for financing. As I talk about in another thread, I'm in the process of applying for a loan rather than take money out of my IRAs, and the credit union has its knickers in a twist because my house is in a trust. They apparently aren't familiar with revocable living trusts. I'm not going to mess with taking it out of the trust, I'll just punt on the loan if I can't convince them this is not a problem.

[pfrank]

O

I think I know why your Mom moved it out of the trust for financing. As I talk about in another thread, I'm in the process of applying for a loan rather than take money out of my IRAs, and the credit union has its knickers in a twist because my house is in a trust. They apparently aren't familiar with revocable living trusts. I'm not going to mess with taking it out of the trust, I'll just punt on the loan if I can't convince them this is not a problem.

I would find another credit union. All of my assets (except my vehicles) are in my revocable trust. My credit union issued my mortgage to my trust. No issues whatsoever. Application process was the same.

[pennywise]

Unlike some states, probating a Will in Florida (which you apparently did anyway) is not particularly difficult, expensive or burdensome. Why did your mother create a trust for herself?

I live in Florida and have been through the probate process as the beneficiary of a will in which a friend left us his estate. It was difficult, expensive and burdensome with a simple will and a simple estate.

You can bet we created a trust, as did my mother in law and my father. I urge everyone I know with any assets in Florida to do the same. Aside from inheritance, the trust has been an incredible godsend in managing and taking care of my MIL as she slides ever deeper into dementia and incapacity.

[shawndoggy]

Well, then, it is in the trust. Show the will to the title company. My will has a provision like this, anything I own that is not in the trust when I die, goes into the trust.

You do not have a problem.

No problem except probate. Sure, the will says that the trust is the beneficiary, but assets not in trust get probated according to will. So whether the will says that the house goes to Aunt Jane, Cousin Vinnie, the Humane Society, or the Trust, it's all the same. Administration of will occurs through probate.

[bsteiner]

Well, then, it is in the trust. Show the will to the title company. My will has a provision like this, anything I own that is not in the trust when I die, goes into the trust.

You do not have a problem.

No problem except probate. Sure, the will says that the trust is the beneficiary, but assets not in trust get probated according to will. So whether the will says that the house goes to Aunt Jane, Cousin Vinnie, the Humane Society, or the Trust, it's all the same. Administration of will occurs through probate.

You probate the Will, not the assets.

Unless you're in a state like California where probating a Will is said to be difficult, what's the problem with probating a Will? In most states it simply means filing some forms with the court together with the Will and a death certificate.

[shawndoggy]

You probate the Will, not the assets.

Unless you're in a state like California where probating a Will is said to be difficult, what's the problem with probating a Will? In most states it simply means filing some forms with the court together with the Will and a death certificate.

I've only ever heard the word probate, when used as a verb, to refer to an estate. I.e. one "probates the decedent's estate." (i.e. probate still happens if the decedent dies intestate).

But whatevs, that's semantics. Don't know about your jurisdiction's requirements, or Florida. In my state probate requires petitioning for appointment of administrator, giving notice to creditors, waiting statutory period, getting order approving distribution of estate, etc. Even if it's "simple" and there are no creditors' claims, and everything otherwise goes as planned, the process will take at least 8 months here.

[bsteiner]

You probate the Will, not the assets.

Unless you're in a state like California where probating a Will is said to be difficult, what's the problem with probating a Will? In most states it simply means filing some forms with the court together with the Will and a death certificate.

I've only ever heard the word probate, when used as a verb, to refer to an estate. I.e. one "probates the decedent's estate." (i.e. probate still happens if the decedent dies intestate).

But whatevs, that's semantics. Don't know about your jurisdiction's requirements, or Florida. In my state probate requires petitioning for appointment of administrator, giving notice to creditors, waiting statutory period, getting order approving distribution of estate, etc. Even if it's "simple" and there are no creditors' claims, and everything otherwise goes as planned, the process will take at least 8 months here.

Probate means establishing that a Will is valid.

Having nothing to do with probating the Will, it usually takes more than 8 months to administer an estate. You have to ascertain the assets, collect them, pay the debts and expenses, reimburse whoever advanced the funeral expenses, file the decedent's final income tax returns, file the estate tax returns (if any), deal with the decedent's home, deal with any retirement benefits (even though they pass outside the Will), consider disclaimers, consider various tax elections, etc.

[LarryAllen]

Such a common problem. Everybody that has a trust should double check their assets while they are alive and especially if they did a re-fi as banks used to always take houses out of trusts and often the title company didn't put it back in.

In California there is a law called a "Heggstad petition" for people that omit assets from trusts. It avoid a full probate but is still a trip to probate court.

[Determined]

Such a common problem. Everybody that has a trust should double check their assets while they are alive and especially if they did a re-fi as banks used to always take houses out of trusts and often the title company didn't put it back in.

In California there is a law called a "Heggstad petition" for people that omit assets from trusts. It avoid a full probate but is still a trip to probate court.

That's good to know. I will remember this lesson since I now have a revocable trust. I am single with a minor child and more assets since Mom died.

To update, the title company called to verify Mom's information for the mortgage payoff. The mortgage is definitely in the trust. I haven't heard back from our lawyer, but the title rep said she didn't need anything else. Hopefully that's a good sign.

[LarryAllen]

Such a common problem. Everybody that has a trust should double check their assets while they are alive and especially if they did a re-fi as banks used to always take houses out of trusts and often the title company didn't put it back in.

In California there is a law called a "Heggstad petition" for people that omit assets from trusts. It avoid a full probate but is still a trip to probate court.

That's good to know. I will remember this lesson since I now have a revocable trust. I am single with a minor child and more assets since Mom died.

To update, the title company called to verify Mom's information for the mortgage payoff. The mortgage is definitely in the trust. I haven't heard back from our lawyer, but the title rep said she didn't need anything else. Hopefully that's a good sign.

That's surprising as mortgages are usually NOT in the trust. It's the deed that is usually in the trust. Most commonly the mortgage is in the name of an individual unless people go to the effort of connecting their mortgage to their trust or actually take the mortgage out in the trust name. It can be a problem after death as the mortgage company typically won't talk to the family or trustee or anybody. California now has a law to get around that which is great for the survivors. That's Civil Code 2920.7.

[Determined]

Such a common problem. Everybody that has a trust should double check their assets while they are alive and especially if they did a re-fi as banks used to always take houses out of trusts and often the title company didn't put it back in.

In California there is a law called a "Heggstad petition" for people that omit assets from trusts. It avoid a full probate but is still a trip to probate court.

That's good to know. I will remember this lesson since I now have a revocable trust. I am single with a minor child and more assets since Mom died.

To update, the title company called to verify Mom's information for the mortgage payoff. The mortgage is definitely in the trust. I haven't heard back from our lawyer, but the title rep said she didn't need anything else. Hopefully that's a good sign.

That's surprising as mortgages are usually NOT in the trust. It's the deed that is usually in the trust. Most commonly the mortgage is in the name of an individual unless people go to the effort of connecting their mortgage to their trust or actually take the mortgage out in the trust name. It can be a problem after death as the mortgage company typically won't talk to the family or trustee or anybody. California now has a law to get around that which is great for the survivors. That's Civil Code 2920.7.

So after being certain the mortgage was in trust, I have checked again. You are correct. It is in my mom's name. There are several business loans that were in my dad's trust. He died before my mom. So I am listed as successor trustee on these. This is why I so appreciate these boards. Sorting out my mom's estate has been quite complicated.

[Determined]

Another update. Our lawyer has not contacted the title office. The title office in Florida offered to refer me to someone who can do the probate in Florida. I went back through emails to see where things went awry. The appraisal of the home from last March was written in the name of her estate. When I forwarded it to the attorney's office and pointed out that it was not on the inventory list, I was told it was in trust and did not need to be listed. I know there is nothing to be done but move forward, but I am beyond frustrated that I asked the right question and was basically dismissed.

We are fortunate the sale will proceed even if it is delayed.

[Carefreeap]

Such a common problem. Everybody that has a trust should double check their assets while they are alive and especially if they did a re-fi as banks used to always take houses out of trusts and often the title company didn't put it back in.

In California there is a law called a "Heggstad petition" for people that omit assets from trusts. It avoid a full probate but is still a trip to probate court.

And takes six months. Cost me $2,500 ten years ago. I was also told that while it was required it's a good idea for the beneficiaries to show up for court. Sure enough, even though I was the Trustee the judge wanted to know that my brother (the other beneficiary) was in agreement to sell the house.

ETA: I think a full probate would have taken a year and cost a lot more.

[riverguy]

Another update. Our lawyer has not contacted the title office. The title office in Florida offered to refer me to someone who can do the probate in Florida. I went back through emails to see where things went awry. The appraisal of the home from last March was written in the name of her estate. When I forwarded it to the attorney's office and pointed out that it was not on the inventory list, I was told it was in trust and did not need to be listed. I know there is nothing to be done but move forward, but I am beyond frustrated that I asked the right question and was basically dismissed.

We are fortunate the sale will proceed even if it is delayed.

Why do you even need to do this? Most probate final orders I have seen typically have a catch all provision that says something of the nature that any unlisted property is transferred according to the terms of the will.