Q: What steps do I need to take to transfer mortgaged real-estate property into trust? please see details
My friend passed away. He appointed me as an executor of his estate. In his will he requested to set up the trust(It hasn’t been set up before he passed), which will include money and real estate property(50% currently)mortgaged , when his 14 years old son turn 21 the trust must go to him.
On the deed of trust only my friends name. I have been appointed as executer through the court already and have legal documents.
What steps do I need to take to transfer mortgaged real-estate property into trust, rent it and make sure it is working as rental property until the beneficiary is 21 years old?
A:
The mortgage more than likely has a 'due on sale' clause which means you CANNOT transfer it to a trust or any other entity without paying the outstanding balance first. You may be forced to sell the property to pay off the loan unless there are other liquid assets you can tap for a payoff.
PLEASE seek local legal help to insure you are taking steps in the right order to avoid issues. DO NOT CONTACT THE MORTGAGE COMPANY for 'help'. Get your own attorney!
--This answer is offered for informational purposes only and does not constitute legal advice or create an attorney/client relationship. I am licensed to practice in Michigan only. Please seek competent local legal help if you feel you need legal advice!
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