Idaho Law Blog
By Matthew P. Stucki
There are numerous reasons why an individual would select a living trust as the vehicle to deal with the distribution of his or her property upon death. A living trust is set up to allow the owner of the property to transfer said property into the trust and out of the owner’s name. When making this transfer of property into a trust, there are important insurance considerations that need to be considered.
Individuals often purchase insurance, such as car insurance or home owner’s insurance, to protect their property against damage. However, when that property is transferred, the insurance provider is no longer responsible for coverage. This makes it important for all individuals who transfer property into a living trust to contact their insurance agent and add the living trust as an insured. Failure to list the living trust as an insured may give your insurance provider a reason to reject claims made by you.
A similar problem can arise with title insurance. In most cases, when an individual buys a home, he or she pays for a title insurance policy along with the purchase of the home. This policy ensures that the title is marketable title without any encumbrances or liens. However, policies issued by Title Companies are only good while the property is owned by the individual. If the individual sells the property to a 3rd party, the title company is off the hook. Lapse in title insurance may affect real property that is transferred into a living trust depending on the title company. Some title companies have built-in language that extends the policy to cover property transferred from an individual into a trust, if the individual is named as the trustee and beneficiary. Other title companies do not have such language. Contacting your title company can eliminated a lapses in coverage.
For questions regarding the living trust or issues involving living trusts, feel free to call at 877-232-6101 or 208-232-6101 for a consultation with Matthew P. Stucki and the Racine Olson team of Estate Planning attorneys in Pocatello, Idaho Falls, or Boise. You can also email Matthew P. Stucki directly at mps@racinelaw.net. We will answer your Idaho Estate Planning questions.
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