Make Sure to Add Your Trust To Your Homeowners Insurance Policy

In the aftermath of California's recent wildfires, social media has been buzzing with an eye-opening insurance issue affecting trust owners.  Several families have shared their stories of unexpected insurance claim denials. These denials occurred not because of insufficient coverage but because, after transferring their homes into their trusts, the families had not taken the next step of naming their trusts on their insurance policies.  This situation is preventable with the right guidance and planning.

A Simple Step That Makes a Big Difference

When you create a living trust, you're taking an important step to protect your family's future. Part of that protection involves ensuring that your homeowners insurance policy and your trust work together effectively. When you transfer your home into your trust, you're changing its legal ownership structure. Although you still live in the home and, as a practical matter, your control of the home does not change, the trust becomes the legal owner of the property.  Your insurance policy needs to reflect this change in legal ownership.

Fortunately, updating your policy is typically straightforward.  Here’s what you need to do:

1. Contact your insurance agent and inform them that you've transferred your home into a trust
2. Request that your trust be added as an "additional insured" on your policy
3. Ensure the trust's name is listed exactly as it appears on your trust documents
4. Keep a copy of the updated insurance policy with your trust documents
5. Repeat these steps for any real property you have transferred into your trust and for all insurance policies that cover your property (for example, insurance for rental properties or umbrella insurance policies)

Most insurance companies handle these updates routinely. Usually, all you need to do is call the office or send your agent an email.

Peace of Mind for You and Your Family

Just as your trust provides protection for your family's future, updating your insurance policy to properly reflect your trust’s ownership of your home protects your family's present security. This simple step helps ensure that your careful estate planning works as intended.

How We Help Our Clients Stay Protected

At Shaila Buckley Law, we understand that funding your trust involves many moving parts. That's why we've made it a priority to guide our clients through every necessary step. During your signing meeting, we specifically discuss the importance of naming your trust as an "additional insured" on your homeowners insurance policy. We also include this crucial task on the detailed "Trust Funding To Do List" we prepare for each client.
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If you have questions about your trust or need assistance with any aspect of your estate plan, our team is here to help. We're committed to ensuring your estate plan provides the protection and security you and your family deserve.