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Is Your House in Your Trust After a Refinance?

houses in Las Vegas
By: Kim Boyer | October 1, 2021

My office received a frantic call from a woman.  She had been named successor Trustee of her mother’s trust and knew that her mother had been meticulous in making sure that all of her assets had been properly titled into her trust, including her home.  Because of the new low interest rates, her mother had refinanced the home, lowered her monthly payments and allowed for more disposable income each month, as her mother lived only on her Social Security.  Unfortunately, her mother’s health took and unexpected turn and she quickly passed away.  The daughter believed that her mother’s home was titled in the trust and she listed it for sale.  The sale was set to close the next week, but the title company contacted her and informed her that the house was not titled in trust and that a probate court order is needed.

What most people do not realize is that when a home is held in trust and the owner chooses to refinance, the home is taken out of trust and when the refinance is complete, the a new deed must be done returning the home to the trust.  This is not automatically done by the title company.  If the owner of the home passes away before the home is retitled into the trust, a probate court order will be needed in the State of Nevada.

There are different types of probates in Nevada, including Set Aside, Summary Administrations and Full Administrations.  Both Summary Administration and Full Administration take many months and often up to a year to complete.  There is a new law in Nevada to help clients like the one above.  It still requires a court order, but it is a set aside which is much shorter process to obtain the necessary court order.  The new law, effective October 1, 2021, states:

If a decedent’s will directs that all or part of the decedent’s estate is to be distributed to the trustee of a nontestamentary trust established by the  decedent and in existence at the decedent’s death, the portion of the estate subject to such direction may be set aside without administration. Any portion of a decedent’s estate set aside to the nontestamentary trust pursuant to this paragraph is subject to creditors of the estate unless the petitioner provides proof to the court that the trustee has published or mailed the requisite notice to such creditors on behalf of the nontestamentary trust and settlor pursuant to NRS 164.025.

This change now allows for an estate of any amount to set aside without going through a long court process.  The decedent must have a valid trust and a valid will, generally referred to as a “pour-over will,” which directs that any property not held in the trust should be distributed pursuant to the trust agreement.  The change further provides that a Notice to Creditors can be published as to the trust and the settlor of the trust.

It is important that, after a refinance, you make sure that your home is retitled into your trust to ensure that the home is distributed according to the terms of your trust and your loved ones are not required to get a court order.

Disclaimer:  Information provided as a service of Kim Boyer, Certified Elder Law Attorney, updated as of 10/1/21. It does not constitute legal advice. For specific questions you should consult a qualified attorney.

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