I am a Mortgage Loan Officer, Realtor, and A Certified Probate Real Estate Specialist.

 Here are some facts most people don’t know.

• A loan can be made on a property in Trust while the person(s) is alive
•  Probate only comes into play at the time of death.
• A Realtor can sell properties in Probate and when the title is in Trust.
•  A loan officer can only make a loan to living people so there is no loan to the owner for Probate.

For loans, when Living Trusts became popular most banks required that the borrower would do a deed transfer to take the property out of Trust and when the loan funded, the borrower could transfer the property back to the Trust.

Of course, this caused problems and lawsuits. Sometimes a title company, loan officer, or borrower would forget to transfer the title back to the Trust. Then, upon death of the owner there were problems.   Once I did a loan for $8,500,000 and the property came out of Trust and into the owners (borrower) name. I made sure that the paper work was done properly and I  drove more than 50 miles to the courthouse and I was there the minute the court house opened to transfer the title back to Trust.

Today when we make loans for properties in Trust we do not need to take it out of Trust but simply must complete a one page Certificate of Trust. The form takes only a few minutes to fill out. It is sent to the Lender and the Title Company and is notarized at the time of loan signing. That’s is a lot safer than taking the property out of Trust and then putting it back into Trust.

At the time of death, a property in Trust can be sold quickly and the process is simple and inexpensive. If the owner (s)  pass  away with no Trust, the home will go into Probate which can take up to a year or more and is usually very expensive.

Most people pay an attorney between   $1800 – $2500 to  establish  a Living Trust. At the time of death the person designated can list the home for sale almost immediately. If the owners of property pass away without a Trust then the property can be transferred only via Probate.

Statutory probate fees in California are:

• 4% of the first $100,000 of the estate,
•  3% of the next $100,000
• 2% of the next $800,000
•  1% of the next $9,000,000.

Real Estate valued at $1,000,000 will have fees of $23,000. That is 10 times more than someone would pay for a Living Trust. Again, I am not an attorney and avoid anything close to legal advice but I can write about my experiences and will be writing regarding loans and selling homes involved with Trusts, Wills, and Probate.

The Probate process is difficult, takes more time and costs more money. That is why I suggest all homeowners consider establishing a Living Trust.

Douglas Michael Jones
Calif DRE 00979517
nmls 286668
Realtor and Certified Probate Real Estate Specialist