Fixing a broken trust
My Refinance Took My House Out of My Trust. How Do I Put It Back?
This happens constantly, and almost nobody is told. The fix is one recorded deed. Here is how to check whether it happened to you, and how to put the house back.
The short answer
Pull the latest recorded deed on your home. If it names you personally rather than as trustee, the refinance deeded the house out of the trust and nobody deeded it back. To fix it, record a new trust transfer deed from yourselves to yourselves as trustees, signed before a notary, with California's Preliminary Change of Ownership Report. No reassessment, no lender permission needed, about $100 to $150 in fees if you do it yourself.
Mantle prepares and records this deed as part of its $499 activation, or drafts it free for you to file yourself.
How it happens
You set up a living trust and deeded your home into it. Years later you refinanced. Somewhere in the closing packet was a deed moving the house from “you, as trustees” back to “you,” because the lender or title company would not fund a loan on property held in a trust. You signed it with forty other pages. The loan closed.
The step that was supposed to follow, a second deed moving the house back into the trust, was not the lender's job and not the title company's job. Often the closing officer mentions it; often they do not. Either way it goes on nobody's calendar, and the house sits in your personal name while your trust document says it owns a house it no longer owns.
The tell on the recorder's index
Two deeds within weeks of each other: trustees to individuals, then a deed of trust to the new lender. No third deed from individuals back to trustees. If that is your deed history, the house is out.
Putting it back, step by step
Read your current deed
Search your county recorder's online index by your last name and find the most recent grant deed or quitclaim deed on the property (not the deed of trust, which is the mortgage). Read the "grantee" line. Trustee language means you are fine. Your bare names mean the house is out.
Contra Costa, Alameda, Los Angeles and most California counties offer free online index searches; a copy of the document is a few dollars.
Prepare a trust transfer deed
In California this is a grant deed. Grantor: you (and your spouse), as individuals. Grantee: you as trustees of your trust, with the trust's exact name and date as they appear on the trust document. Use the legal description and assessor's parcel number from the current deed, word for word.
Documentary transfer tax: none, under Revenue and Taxation Code §11930 for a transfer into your own revocable trust. Write the exemption on the face of the deed.
Sign before a notary
Every person on title signs, and each signature is acknowledged by a notary. California recognizes a remote online notarization performed by a notary commissioned in a state that allows it (Civil Code §1189), which is how an online video notary session works for a California deed.
Do not sign ahead of time. The notary has to watch.
File the PCOR with the deed
California requires a Preliminary Change of Ownership Report (BOE-502-A) with every recorded deed. Check the box for a transfer to a revocable trust; that is what tells the assessor not to reassess.
Without the PCOR the recorder charges an extra fee or rejects the filing, and the assessor may send a reassessment notice you then have to fight.
Record it, and keep the stamped copy
Deliver the deed and PCOR to the county recorder in person, by mail, or through an e-recording service, and pay the recording fee, typically $20 to $150. The recorder returns a copy with a recording stamp and document number.
That stamped copy is the proof the house is in the trust. Put it with the trust document and tell your successor trustee where it is.
Tell your insurer
Call your homeowner's insurance company and ask them to add the trust as an additional insured. It is free and takes a few minutes. The lender cannot call the loan over it (Garn-St Germain Act); if your deed of trust asks for notice of a transfer, a one-line letter covers it.
Before the next refinance
Ask the loan officer, before you apply, whether they will close with the home vested in the trust. Many will, with a copy of the certificate of trust. If they insist on deeding out, ask the escrow or title officer to prepare the deed back in and record it right after closing, and get that in writing. Then check the recorder's index a month later.
More on how trusts and mortgages interact, including whether to tell your lender when you first fund the trust: Can you put a house with a mortgage in a trust? →
How Mantle handles it
If you created your trust with Mantle, or you have an existing trust and just need the deed, Mantle prepares the trust transfer deed from your current deed's vesting and your trust's name and date. The document is free to download with a signing guide. The $499 activation adds the online notary session and Mantle records the deed and PCOR with your county.
Common questions
Why did my lender take my house out of my trust to refinance?
Many lenders and title companies will not close a loan on property vested in a trust, or will only do it with extra paperwork, so they have you sign a deed moving the home from the trustees back to you personally at closing. The loan funds against you as an individual. Putting the home back into the trust afterward is your job, and the closing packet rarely says so.
How do I find out whether my house is still in my trust?
Look at the most recent recorded deed for the property. If the grantee reads something like "Jane and John Smith, Trustees of the Smith Family Trust dated...", the house is in the trust. If it reads only your names as individuals, it is not, regardless of what your trust document says. Most California county recorders let you search recorded documents online by name.
What does it take to put the house back in the trust?
One new deed: a trust transfer deed (a grant deed in California) from you as individuals to yourselves as trustees of the trust, signed before a notary by every owner on title, recorded with the county recorder along with a Preliminary Change of Ownership Report. There is no reassessment for a transfer into your own revocable trust, and no change to the loan.
Does putting the house back in the trust violate my new mortgage?
No. The federal Garn-St Germain Act prevents a lender from calling a loan because you transferred your home into a revocable living trust in which you remain a beneficiary and keep living there. You do not need the lender's permission. Telling your insurer is a good idea.
What happens if I never put it back?
The house is a probate asset. Your trust still controls everything else it owns, but the home passes through the court, with statutory fees on its gross value and a year or more of delay. In California, a $1,000,000 home alone produces roughly $46,000 in attorney and executor fees.
Related reading
Putting a mortgaged house in a trust
Mortgage considerations, lender communication and situations that need individual advice.
Read moreHow to transfer your house to a trust
The deed paperwork explained step by step, with state-specific notes.
Read moreWhich online trust services actually record the deed?
What LegalZoom, Trust & Will and Mantle each do about the deed, with prices.
Read moreLiving trust in California
California planning considerations, documents and the steps for transferring your home.
Read more