How To Preserve Your Title Insurance When Transferring Property
Are you getting ready to transfer a property or two?
If the answer is no, let’s just hypothetically say you’re looking to transfer your properties into a legal structure as part of your new asset protection plan.
As a real estate investor you’re probably aware of the cost of insurance for a property. The last thing you want to do is pay more money than you have to for insurance.
Usually when you transfer a property your hazard and title insurance expire as per your insurance contract.
But if you transfer your properties into a land trust you’ll be able to preserve both your hazard and title insurance. This in addition any other insurances you might have for the property.
Land trust are a common component of many asset protection plans because of they’re anonymous nature. And as a small bonus you won’t have to worry about violating the due on sale clause when you transfer your property to a trust.
What’s The Catch?
There is no catch.
However, you do need to be the settlor of the property you’re transferring to preserve your insurance. Also, you need to be the beneficiary of the trust you’re transferring the property to.
Before transferring any property I recommend you review any insurance policy you have, especially your title insurance policy. It shouldn’t be too hard to find the part of your insurance contract dealing with this issue.
Usually the land trust you want to transfer property to will meet your insurance policy’s transfer criteria. If you’re not sure, check with your agent.
Still Have Concerns About a Transfer?
The good news is there’s a guaranteed way to make this transfer work!
You can always add a land trust as a beneficiary of your insurance policies. Adding your land trust as a beneficiary guarantees that you’d preserve your insurance.
This method is a million times better than getting a new insurance policy. And why? Because, as I’m sure you know, a new insurance policy would have to use the current value of the property.
This is likely higher than the value of the property when you bought it.Which means you’d actually end up having to pay more than before.
First you’d have to pay to re-issue the policy, and since your property has probably appreciated in value, your policy will be more expensive.
I hope this information was useful to you, and if you have any questions feel free to ask in the comments or by contacting me directly. Also, now that you know how to preserve your insurance you may want to consider learning how to preserve your wealth using asset protection.