Question: Do I need to pay off my current mortgage before transferring my home into a trust for my children’s benefit?

Answer: Unlike most folks who maintain their homes in trust, you asked permission before making the transfer.  Unfortunately, your consideration will not be returned by your lender.  Transferring residential property into a trust is usually not allowed under standard mortgage provisions.

Lenders like consistency.  They do not want the property over which they hold a mortgage to be transferred in any way.  Practically, however, such transfers occur often and lenders do not actively enforce against them.  Should any problems be discovered by the lender and they catch wind of the transfer, they will usually only require that you place the property back into the original forms of ownership.

Should you wish to take on the risk understand the legalities and weigh the potential harm of not owning a property in trust verses transferring and being caught by the lender.  Most often, if trust protection is being desired, people decide to assume the risk and move forward with the transfer.

Further if you have an owner’s policy of title insurance, such a transfer will nullify the policy without approval in advance and payment of a small endorsement fee.

Attorney James Haroutunian practice includes real estate and estate planning law.  Contact him with questions at the Haroutunian Law Office at 630 Boston Road, Billerica, 978-671-0711,, or by email at

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