You can buy a house under a trust, and for most buyers the practical path is a revocable living trust that either takes title at closing or receives the property by deed shortly after. The trust holds legal title, the trustee signs the paperwork, and if you set the trust up the usual way you are the trustee and the beneficiary — so day-to-day, nothing about living in the house changes. The mechanics differ from a conventional purchase in a few specific places: how you get a mortgage, what documents the title company wants, how your insurance needs to be worded, and how a handful of tax rules treat the arrangement.
Pick the Type of Trust First
The kind of trust you use decides almost every question that follows. A revocable living trust lets you serve as both trustee and beneficiary. You keep full control of the property, can amend the trust whenever you want, and can dissolve it entirely. For homeowners whose main goal is estate planning and avoiding probate, this is the standard choice.
An irrevocable trust behaves differently. Once created, it generally cannot be changed or undone, and it becomes a separate legal entity that owns the property independently of you. Lenders and title companies deal only with the trustee, who can act only within the powers spelled out in the trust document. The tradeoff is real: you give up control, but you get asset protection and estate tax advantages a revocable trust cannot deliver.
Most of the rest of this article assumes a revocable living trust, because that is what fits the typical buyer. Where irrevocable trusts change the answer, it is called out.
Two Ways to Put the House in the Trust
There are two routes, and the right one depends on whether you need a mortgage.
Buy Directly in the Trust’s Name
The trustee can purchase the home with the trust listed as the buyer from the start. The purchase agreement and closing documents all name the trustee acting in their official capacity. This works best for cash purchases, because getting a lender to write a mortgage to a non-individual entity is difficult.
Buy Personally, Then Transfer
If you need financing, the practical route is to buy the home in your own name, close on the mortgage, and then transfer title into your trust afterward. You work with an attorney or title company to execute a new deed conveying the property from you individually to yourself as trustee of your trust. This is the approach most homeowners take.
The deed itself needs to identify the trust precisely: the trustee, their capacity, the full trust name, and the date the trust was created. A typical format reads: “Jane Smith, Trustee of the Jane Smith Revocable Trust dated March 15, 2023.” Recording fees vary by county, typically $10 to $100. Most jurisdictions exempt transfers from an individual to their own revocable trust from real estate transfer taxes, because beneficial ownership has not changed. A general warranty deed is usually the right instrument for the transfer because it preserves the title protections your lender and title insurer expect to see, where a quitclaim deed makes no promises about the quality of title being conveyed.
Mortgages and the Due-on-Sale Question
Lenders underwrite loans based on personal income, credit history, and employment. A trust has none of those. That mismatch is why most banks will not issue a mortgage directly to a trust, and why the buy-then-transfer approach exists.
The natural worry is whether moving your home into a trust after closing triggers the due-on-sale clause in your mortgage. That clause technically gives the lender the right to demand the full loan balance if you transfer ownership. Federal law removes this risk for revocable trusts. Under 12 U.S.C. § 1701j-3(d)(8), a lender cannot enforce a due-on-sale clause when a borrower transfers property into a trust where the borrower remains a beneficiary and the transfer does not change who occupies the home.1Office of the Law Revision Counsel. 12 USC 1701j-3 – Preemption of Due-on-Sale Prohibitions The implementing regulation says the same thing in nearly identical terms.2eCFR. 12 CFR Part 191 – Preemption of State Due-on-Sale Laws
The protection is specific. It covers revocable trusts where you remain a beneficiary and continue to occupy the home. Transfer the property into an irrevocable trust, or move out, and the lender may have grounds to call the loan.
Refinancing Later
Refinancing a trust-held home usually requires an extra step. Most lenders want the property temporarily transferred out of the trust and back into your individual name before they will close on a new loan. After the refinance closes, you execute another deed putting the property back into the trust. It is routine, generally a couple hundred dollars in deed preparation and recording, but plan for it so it does not catch you off guard.
Documents the Closing Table Wants
Title companies, lenders, and sellers all want proof that the trust exists and that the trustee has authority to act. The standard document is a certification of trust, sometimes called an abstract of trust. Under most states’ version of the Uniform Trust Code, a certification includes the trust’s name, the date it was created, the identity of the current trustee, and the specific powers the trustee holds for the transaction at hand. It does not require disclosure of the trust’s private terms, such as who inherits what.
Some lenders ask for the full trust agreement anyway. This is more common with irrevocable trusts, where the lender wants to verify exactly what the trustee is authorized to do. Have the full document available even if you expect the certification to be enough.
Taxes While You Own It and When You Sell
A common worry is that holding a home in a trust creates a tax mess. For a revocable living trust, the tax picture is almost identical to owning the home in your own name.
The Capital Gains Exclusion Still Works
When you sell a home you have lived in for at least two of the past five years, you can exclude up to $250,000 in capital gains from your income, or $500,000 for married couples filing jointly.3Office of the Law Revision Counsel. 26 USC 121 – Exclusion of Gain From Sale of Principal Residence The exclusion still applies when the home is held in a revocable trust. Federal regulations treat the grantor of a revocable trust as the owner of the residence for the two-year ownership requirement, and a sale by the trust is treated as if made by the grantor personally.4eCFR. 26 CFR 1.121-1 – Exclusion of Gain From Sale or Exchange of a Principal Residence
An irrevocable trust is not treated the same way. Because the grantor is no longer the owner, the trust itself may owe capital gains tax on a sale, and the Section 121 exclusion generally does not apply.
Step-Up in Basis at Death
Property in a revocable trust typically receives a stepped-up basis when the grantor dies. The home’s cost basis resets to its fair market value at the date of death, which wipes out unrealized capital gains that accumulated during the grantor’s lifetime. Beneficiaries who later sell only owe tax on appreciation that occurs after they inherit. This works because revocable trust assets are included in the grantor’s gross estate. Property in an irrevocable trust may not qualify for the same step-up, depending on the trust’s structure.
Homestead Exemption
Most states offer a homestead exemption that reduces the taxable value of a primary residence. Transferring your home into a revocable trust does not automatically disqualify you. The general rule across most jurisdictions is that if the trust beneficiary occupies the property as their primary residence, the exemption remains intact. Some states have specific filing requirements or language that must appear in the trust document, so check your local assessor’s rules before transferring.
Transfer Taxes
Moving a home from your individual name into your own revocable trust generally does not trigger real estate transfer taxes. Because beneficial ownership has not changed, most taxing authorities treat the transfer as a non-event. The exemption is less certain for transfers to an irrevocable trust, where the grantor genuinely gives up ownership.
Insurance the Transfer Can Quietly Break
Homeowners consistently miss this. Transferring the house into a trust changes the legal owner, and your homeowners insurance policy needs to reflect that. If the trust is not on the policy, the insurer can deny a claim on the ground that the actual owner is not covered. Call your insurance company and add the trust to the policy.
Ask specifically for the trust to be listed as an additional insured, not merely an additional interest. Additional insured status extends the policy’s full coverage to the trust and protects the trustee against property damage and liability claims. Additional interest status only notifies the insurer that the trust has a stake in the property and does not extend coverage.
Title insurance deserves the same attention. A standard owner’s title insurance policy is not automatically assignable, and the trust or trustee may not fall within the policy’s definition of “insured” after a transfer. The coverage you paid for at closing might not protect the trust. Some title insurers offer expanded policies that cover transfers to the insured’s revocable trust, sometimes for an additional premium. Ask your title company about this before you record the new deed.
What a Trust Does Not Protect Against
People sometimes assume that putting a home in a trust shields it from creditors. For a revocable trust, that is not true. Because you retain full control and can dissolve the trust at any time, courts treat the assets inside it as still belonging to you. Creditors can reach them to satisfy debts, and the property can be included in bankruptcy proceedings.5Federal Long Term Care Insurance Program. Types of Trusts for Your Estate – Which Is Best for You
An irrevocable trust is what offers real creditor protection. Once you transfer property into an irrevocable trust, you no longer own it. The trust is a separate entity, and its assets are generally excluded from your personal bankruptcy estate and shielded from your creditors.5Federal Long Term Care Insurance Program. Types of Trusts for Your Estate – Which Is Best for You You give up control in exchange. You cannot take the property back, change the trust terms, or direct the trustee to sell unless the trust document grants that power.
What It Costs
Setting up a revocable living trust through an attorney typically costs $1,500 to $5,000 or more, depending on the complexity of your estate and where you live. That covers drafting the trust document, transferring assets, and the initial consultation. Online services and DIY options cost less but come with less customization and no legal advice.
Beyond the trust itself, budget for deed preparation and recording fees when you transfer the property, any title insurance endorsement to cover the trust, and the cost of pulling the property out and putting it back if you refinance. None of these are large on their own, but they are worth knowing about before you start.