Trust Property Insured Correctly?
Be Sure Your Property in Your Revocable Living Trust is Properly Insured.
Please do not take for granted that transfers of property to your revocable living trust will maintain your insurance protection. Your revocable living trust uses your social security number and is a grantor trust from the internal revenue service perspective. You may freely transfer assets into and out of it. It is best that you fully fund your revocable living trust by transferring your assets into the name of your revocable living trust. For those of you who work with our office, you know how much we emphasize funding your revocable living trust to make sure it works to its best capacity for you.
Legally, though you maintain total control of all the assets owned by your revocable living trust, you no longer own those assets. That legal point is what allows assets owned by your revocable living trust to avoid the probate court process at your death. However, that legal point may also be used to argue that your property in your trust is not covered by your property and casualty insurance policy that is solely in your name. To counteract that argument, make sure to notify your property and casualty, home, auto, and umbrella policy agent or agency that you have a revocable living trust and that you want your trust to be an additional insured on your property, casualty, and umbrella policies.
We have included sample wording you may use to contact your agent. You can copy and paste this language into a letter, note, memorandum, email, text message or other method of correspondence with your agent you typically enjoy. Then, make sure to follow up with your agent to assure this has been accomplished. Do this as soon as possible to assure your property enjoys the full coverage you pay for.
>>>PLEASE PROVIDE THE FOLLOWING SAMPLE WORDING BELOW TO YOUR PROPERTY AND CASUALTY, HOME, AND AUTO INSURANCE AGENT<<<
RE: CREATION OF GRANTOR TRUST TO ADD AS AN ADDITIONAL INSURED
We have established a Revocable Living Trust known as follows:
[FULL NAME OF YOUR TRUST INSERTED HERE].
Please note that no new tax ID number is required for this Grantor trust. The trust uses the same social security numbers you have on file as its tax ID number.
Titles of real estate and/or vehicles may be changed to the name of the Trust, and we ask that you add the Trust as an additional Insured on each of our policies for all property insured with you including but not limited to real estate and vehicles that are or may be owned by the Trust now or in the future.
This letter is sent as a courtesy to clarify the title change for the real estate and/or vehicles insured by your company. All other provisions in the insurance policy shall remain unchanged. If you need additional information, please contact us right away.
Your Name as listed on their policies
Policy Numbers: ___________________________
We at Ison Law urge you to take this action promptly to make sure all your property is properly insured. If you own property titled to a limited liability company or other entity, you can follow the same process as above with information about your entity rather than your revocable living trust. We are available to help guide your through this process.
Since 1983, Ison Law has provided customized personal and business legal services. Based in Powell, Ohio, the office works with clients throughout the State of Ohio and elsewhere. The firm offers personalized, comprehensive, and results-focused services.
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