Moving - Living trust - retitling assets?

Question

Michigan:

I'm thinking about selling my home Lease to Own. I'm worried about insurance liability and tax consequences as well as my current mortgage company calling my loan "due on sale" because I'm no longer the owner occupant.

Can I keep this home as my perminent address when I move out of state? I'll pay state tax in MI but TX has none. My wife co/owner would change her address to the new Texas location.

What about a living trust? Would this protect me from liability?

Will my current mortage company allow me to re-title the property to a living trust?

Thanks

Answer 1

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I'm thinking about selling my home Lease to Own. I'm worried about insurance liability and tax consequences as well as my current mortgage company calling my loan "due on sale" because I'm no longer the owner occupant.

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In your lease, you specify that the "renter" pays you the amount of the fire insurance premium AND property taxes which you continue to pay.  The lender CAN NOT call the loan for the due on sale UNTIL you actually give a deed to the property to someone.

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Can I keep this home as my perminent address when I move out of state? I'll pay state tax in MI but TX has none. My wife co/owner would change her address to the new Texas location.

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MI can not be your permant home if you move out of state but your lender does not care where you live as long as you make the home payments and you have not given a deed to the home to someone else.

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What about a living trust? Would this protect me from liability? Will my current mortage company allow me to re-title the property to a living trust?

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You can retitle you home to a living trust and your lender can NOT call your loan for doing so.

You should notify you lender that you are doing this and put the fire insurance in the name of the living trust.  You and I assusme your wife will be the beneficiaries of the living trust.

A living trust is a private document.  Now if you have a smart buyer and they have a good attorney (that you pay for),  the beneficiary of the living trust can be changed to your buyer and your lender will not know about it.  

You should tell your lender you did this but you are under no legal obligagtion to do so.

GOOD LUCK

Answer 2

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