Trusts & Homeowner’s Insurance: Don’t Let a Technicality Deny Your Claim
Creating an estate plan with a living trust is a rock-solid move to protect your home and family from court headaches. But here’s the catch—if you don’t update your homeowner’s insurance after putting your home in a trust, you could be setting yourself up for a denied claim.
Imagine facing major damage to your home and having to pay out of pocket because of a technicality. No, thank you!
Let’s break down how to make sure your trust and insurance are on the same page—so your most valuable asset stays protected.
The Overlooked Danger of Putting Your Home in a Trust
Putting your home in a trust? Smart estate planning move. But here’s the kicker: if you don’t handle your homeowner’s insurance correctly, you could face unexpected complications that hit harder than your morning coffee.
When you transfer your home into a trust, you’re changing its legal ownership. Sure, you might still live there and act as the trustee, but legally, the trust now owns the property. If it’s a revocable trust, this won’t mess with your taxes because, for tax purposes, you’re still the owner. BUT—big “but” here— this title change can give your insurance company a sneaky little loophole to deny your claim.
Imagine your home suffers major damage—a fire, flood, you name it—and your insurance company says, “Sorry, your policy doesn’t match the legal owner.” Yep, denied. Whether or not that denial is valid, do you really want to be fighting an insurance company in court when you should be focusing on rebuilding your life? Didn’t think so.
Insurance companies are sticklers for details, and they base their decisions on who legally owns the property. If there’s a mismatch between your trust and your insurance policy, you’re at risk.
The good news? It’s 100% avoidable.
Learn how to align your homeowner’s insurance with your trust and keep your biggest asset protected. Don’t let a paperwork glitch cost you everything.
Making Sure Your Insurance and Trust Are on the Same Page
So, you’ve put your home in a trust—great move! But don’t stop there. The real protection kicks in when you update your homeowner’s insurance to reflect this change. Here’s how to do it without breaking a sweat (or the bank).
Step 1: Call your insurance company ASAP after transferring your home into a trust. Most insurers know the drill and can easily tweak your policy. They’ll likely add your trust as an “additional insured” or slap on a trust endorsement to keep things legit.
When updating your policy, keep an eye on these key details:
Property Coverage: Make sure the replacement cost reflects today’s construction prices—because, let’s face it, costs have skyrocketed, and your old policy might be stuck in 2015.
Liability Protection: Your policy should cover both you and your trust if someone gets injured on your property. No one wants to deal with a lawsuit surprise.
Additional Structures: Got a detached garage, workshop, or she-shed? Make sure they’re covered too, especially if they’re part of the trust.
Bonus: Most insurance companies make these updates with little to no extra cost. But here’s the kicker—this small admin task could save you hundreds of thousands of dollars if disaster strikes.
Property Pitfalls: Costly Mistakes That Could Leave Your Home Unprotected
When Disaster Strikes, Will Your Insurance Have Your Back? The worst time to find out you’re not fully protected is after disaster strikes. But here’s the good news: you can avoid that nightmare if you know the common pitfalls homeowners face when dealing with trusts and insurance.
🚩 Delayed Notification:
Many people wait months—or even years—to tell their insurance company they’ve transferred their home into a trust. During that time, they’re paying for insurance that might not even cover them. 😳
Pro Tip: Notify your insurance company the moment you create or update your trust. No delays, no risks.
🚩 Incorrect Trust Names:
Close enough doesn’t cut it with insurance companies. Your policy must list the exact legal name of your trust. If your trust is called “The Johnson Family Living Trust dated January 15, 2025,” that’s exactly what should be on your insurance policy—no abbreviations, no shortcuts.
🚩 Skipping Regular Policy Reviews:
Your life changes—so should your insurance. Whether you’ve renovated your home, increased its value, or had changes in your family, regular reviews ensure your coverage still fits your needs. Don’t let an outdated policy leave you exposed.
🚩 Multiple Property Confusion:
Own more than one property? Each one needs its own insurance policy properly aligned with the trust. Just because you updated one policy doesn’t mean all your properties are covered. Assuming = costly mistakes.
Bottom Line:
A little attention now can save you from a lot of stress later. Stay ahead of these pitfalls, and you’ll keep your home—and your peace of mind—secure.
Creating a Rock-Solid Protection Plan
Avoiding costly pitfalls isn’t just a bonus—it’s built right into my comprehensive estate planning process, known as Planning Session. If you’ve got a DIY estate plan, something you snagged from a cheap legal site, or even a basic plan drafted by a traditional attorney, you probably got a nice stack of documents. But here’s the truth: documents aren’t a plan.
That’s where Planning Session steps in. It’s not just paperwork; it’s a strategy designed to cover all the bases, including:
A Current Asset Inventory: We’ll review exactly what you own, how it’s titled, and identify any properties that could be at risk.
Ongoing Reviews: Life happens—marriages, divorces, new babies, unexpected losses. Regular check-ins make sure your plan and insurance stay in sync with your life.
Proper Asset Transfers: Guidance to ensure your assets are fully and correctly transferred into your trust—because missing this step is like locking the door but leaving the window wide open.
And So Much More: Seriously, there’s a lot more. The goal? To keep your family protected, your assets secure, and your legacy intact—without the drama.
Don’t settle for a one-and-done stack of papers. Let’s build a plan that actually works when life throws you a curveball.
Protect What Matters Most with Estate Planning in Sudbury, Massachusetts
At 20West Legal, we don’t just hand you a stack of documents and call it a day. As your Personal Family Lawyer® Firm, I make sure your Estate Plan actually works—no surprises, no loopholes, and definitely no “oops, we missed that” moments.
I’ll help you:
Avoid costly mistakes that could leave your family unprotected
Align your estate plan with your insurance (because yes, that matters!)
Keep your plan updated with regular reviews—because life happens, and your plan should keep up
Don’t wait for a crisis to find out where the gaps are. Let’s get ahead of it. Schedule a Planning Session today, and we’ll review your trust, insurance, and everything in between to make sure it’s all working seamlessly.
Book your complimentary 15-minute consultation now: https://go.20westlegal.com/meeting-scheduler
This article is a service of 20WestLegal LLC. We don't just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love. That's why we offer a Planning Session, during which you will get more financially organized than you've ever been before and make all the best choices for the people you love. You can begin by calling our office in Sudbury, Massachusetts today to schedule an Estate Planning Session and mention this article to find out how to get this $750 session at no charge.
The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.