Why You Should Notify Your Insurance Company When You Transfer Your Home to a Trust

Establishing a revocable living trust is one of the most effective ways to protect your family and streamline the management of your assets during incapacity or after death. Once your trust is signed, the next critical step is to “fund” it. Funding your trust means transferring ownership of your assets into the trust’s name or designating your trust as a beneficiary. This generally includes transferring your real estate to your trust.

After your real estate has been transferred to the trust, we instruct clients to contact their homeowner’s insurance company with a specific request: ask that the trust be added as an additional named insured on the policy. This step can easily be overlooked, but we emphasize it repeatedly because of how important it is to maintaining full coverage.

Why This Matters
When you transfer your home to your trust, the name on the deed changes from you individually to you as trustee of your trust. Even though you still have full control of the property, your insurance company technically views this as a change in ownership. If your policy only lists you as the insured owner, the company could deny a claim because the “named insured” on the policy no longer matches the property’s legal owner.

We instruct clients to ask that both they and their trust be listed as named insureds on their homeowner’s policy to ensure coverage remains intact and there’s no question about who is protected under the policy.

Real-World Consequences
Consider a homeowner who experiences a fire after transferring their property to a trust but never updates their insurance policy. Because the trust isn’t listed as an insured entity, the claim could be delayed, or worse, denied altogether. While each situation depends on the policy language and state law, it highlights a critical point: insurance companies rely on technical accuracy. A seemingly minor oversight can have devastating financial consequences. Taking ten minutes to verify your homeowner’s coverage can prevent major headaches later.

“Additional Named Insured” vs. “Additional Interest”
Many insurance carriers will add the trust as an additional interest, but that’s not the same as being an insured party. An “additional interest” designation merely allows the insurer to notify the trust of policy changes. We encourage clients to ask their agent to confirm, in writing, that the trust is covered as a named insured. If your carrier refuses or limits this option, it may be time to explore other providers.

At Jesson & Rains, we build these details into our planning process because thoughtful protection extends beyond documents. We offer services that inventory your assets and provide fully customized asset transfer instructions with unlimited support during the funding process. Our Legacy Secure Plan assists clients every step of the way as they fund their trusts, and our Legacy Support Program offers ongoing maintenance and review to ensure your trust remains properly funded year after year.

Not sure if you have properly funded your trust? We can help. Contact us to get started.