Ensuring Your Homeowners Insurance Works

Destruction from the fires in Los Angeles has been devastating.  It has also been an important reminder that insurance claims are sometimes denied or delayed due to incorrect names on the policy. 

One of the main reasons my clients initially create a trust is to ensure that their real property passes to their beneficiaries outside of probate.  I generally prepare a deed for them to transfer their real property to be owned in the name of their trust.  Some clients have properties, particularly rental properties, in LLCs,.  In both of these situations, it is important to make sure that your homeowner’s insurance is in order to work as you intend.  

I generally recommend that you add your trust as an additional insured.  Technically, a revocable living trust (RLT) is not an entity; it is a relationship. As such, title to property in the trust is held by the trustee of the trust.  So you might want to list yourself as trustee as the additional insured, for example, “John Smith and Mary Smith, Trustees of the John and Mary Smith Living Trust, dated Jan. 1, 2000, and any amendments thereto.”

If you have property in a trust, if you have inherited property, if you have property in an LLC, or if you have property in an LLC that is owned by a trust, it is worth a call to your homeowner's insurance carrier to make sure that the policy will work when you need it to. 

 If you have any further questions about homeowners policies, trusts, or other ways that events like the recent fires could impact you from a legal perspective, don’t hesitate to reach out.

*This communication is for general informational purposes only and not intended to be legal advice.  You should seek advice from a licensed attorney for proper guidance.