Legal Question in Wills and Trusts in Colorado
Living Trust
Can real estate be included in a living trust if there is a mortgage involved? If so, does the mortgage holder have to be notified before the property is included in the trust?
2 Answers from Attorneys
Re: Living Trust
Even real estate subject to a mortgage can be held in a living trust. However, the mortgage documents will undoubtedly contain a "due on sale" clause, which technically could result in the entire balance coming due upon transfer of the property. Because of this, it is usually a good idea to contact the mortgage holder to secure its consent to the transfer.
Re: Living Trust
You can transfer the real estate to a living trust, but must first obtain the consent of the mortgage company. You should obtain written consent from the mortgage company, which they should provide to you.
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