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Estate Planning Answers for Arizona homeowners.

Can You Put a House in a Trust? Even With a Mortgage

Putting your Arizona home into a trust can spare your family from probate and keep control in your hands if something happens to you. The process is simple if you follow the right steps. Most problems come from sloppy deeds, missed recordings, or shortcuts that backfire.
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Putting a House in a Trust in Arizona, Even With a Mortgage

Yes, you can place your Arizona home into a revocable living trust, even if you have a mortgage, as long as you prepare and record the deed correctly and keep your lender and insurance squared away.

What “putting a house in a trust” really means

You retitle the property from your name to the trustee of your revocable living trust. Your ownership does not vanish, it is just held through the trust, which lets your successor trustee manage or distribute the home without probate.

Does my mortgage block this?

Generally no. Federal law limits lenders from calling the loan due when you transfer your home into your own inter vivos trust, if you remain a beneficiary and occupancy does not change. See 12 U.S.C. § 1701j-3.

Core steps, the simple way

  • Confirm your trust details: correct trust name, date, and current trustee.
  • Prepare a vesting deed to the trustee of your trust, then sign and notarize.
  • Record the deed in the county where the property sits, within the statutory window, and include the required affidavit or exemption. See A.R.S. § 33-411.01 and A.R.S. § 11-1133.
  • Update homeowners insurance and notify your mortgage servicer and HOA of the new vesting.
Deed types in practice

Arizona owners commonly use a special warranty deed or a warranty deed for a trust transfer. A quit claim deed is simpler but gives no title promises. If title insurance is in place, ask your title company which deed keeps coverage clean and whether an endorsement is advisable.

Due-on-sale concerns, decoded

The Garn-St. Germain Act generally prevents a lender from enforcing a due-on-sale clause when you move your primary residence into your revocable trust and stay a beneficiary with no change in occupancy. Best practice: give your servicer notice with a copy of the recorded deed and the relevant trust page, and keep making payments on time.

Reference: 12 U.S.C. § 1701j-3.

Recording and the Affidavit of Property Value

Arizona recorders require proper formatting and fees. Most deeds need an Affidavit of Property Value unless an exemption on the face of the deed applies. Your deed is not “official” until recorded, so do not skip this step.

Community property and spouses

Arizona is a community property state. If you are married and the home is community property, both spouses typically join the deed into the trust. Your trust plan can keep community property treatment while adding disability and probate protections.

Insurance and practical clean-up

Ask your insurer to add the trustee or trust as a named insured or additional interest. Update tax mailing addresses, HOA records, and your estate plan schedule of assets so your trustee can find the deed later.

When to pause or get help

Press pause if a refinance or sale is already in motion, if there are title defects, or if there is a due-on-sale wrinkle for non-owner-occupied property. A quick title and lender check avoids rework.

Key Questions Answered on Putting Your Home in a Trust

Putting your home in a trust raises a lot of practical and legal questions. This section breaks down the most common concerns Arizona homeowners face, giving you clear, straightforward answers you can actually use to make informed decisions.

Can You Put a House With a Mortgage in a Trust?

 

Yes. In Arizona, you can place a mortgaged home into a revocable living trust without triggering the lender’s due on sale clause. This protection comes from the federal Garn–St. Germain Act of 1982, which allows the transfer as long as you remain the trust’s beneficiary and the home is your primary residence. Even though the law permits it, letting your lender know avoids any confusion and ensures their records match the updated title.

Source: https://legalclarity.org/can-i-put-my-house-in-a-living-trust-if-i-have-a-mortgage

How Do You Put Your House in a Trust in Arizona?

Moving your home into a trust is a legal title change. Here’s the process:

  1. Create or update your revocable living trust and clearly list the property.
  2. Prepare a deed (Quitclaim or Warranty) transferring the home from you to yourself as trustee.
  3. Record the deed with your county recorder’s office.
  4. Notify your lender and give them a copy if they request it.
  5. Update insurance to name the trust as an insured party.

Tip: Use the exact legal description from your current deed.

Source: https://www.mohavecourts.az.gov

Should I Add My Child to the Deed or Use a Trust?

In most cases, using a trust is the safer and more flexible choice. Adding your child directly to your home’s deed can create unintended tax and legal issues.

  • Gift tax concerns: While Arizona has no state gift tax, the IRS treats many property transfers as gifts if they exceed the annual exclusion amount under 26 U.S. Code § 2503. That may require filing a federal gift tax return.
  • Creditor and legal exposure: Once your child is on the title, your home could be at risk in the event of their divorce, lawsuit, or bankruptcy.
  • Loss of step-up in basis: If your child co-owns the property now, they may lose the full capital gains step-up that would apply if they inherited it after your death.

A revocable living trust allows you to keep full control during your lifetime, shield the property from your child’s potential legal or financial issues, and ensure they inherit under the terms you set. For comparison, Arizona law also allows for a beneficiary deed under ARS § 33-405, but trusts generally provide more flexibility and control.

What Deed Should I Use?

When transferring your Arizona home into a trust, the two most common options are the Quitclaim Deed and the Warranty Deed. A quitclaim deed is straightforward and simply transfers whatever ownership interest you have in the property. It does not make any promises about the title, so if there are issues, the new owner accepts them as-is. A warranty deed goes further, transferring the property with a guarantee that the title is clear and free of undisclosed claims.

Regardless of which you use, accuracy is essential. The deed must include:

  • The exact legal description from your current recorded deed
  • The full legal name of your trust

Once complete, the deed must be recorded with the county recorder in the county where the property is located, as required by Arizona Revised Statutes § 33-401. In many cases, you also need to submit an Affidavit of Property Value unless you qualify for an exemption under Arizona Revised Statutes § 11-1133 (https://www.azleg.gov/ars/11/01133.htm).

Taking the time to choose the right deed and record it properly ensures your trust owns the property without future title issues.

Topic Glossary, Arizona Home in a Trust

Plain-English definitions with quick links.

Revocable Living Trust

A legal arrangement you create during life that you can change or revoke. It holds title to assets so your successor trustee can manage or transfer them without probate.

Trustee

The person or institution that holds legal title to trust property and manages it for the beneficiaries according to the trust document.

Successor Trustee

Your named backup, ready to step in if you become unable to serve or after you pass, with authority to manage the home and other trust assets.

Settlor, Grantor, or Trustor

The person who creates and funds the trust. In most Arizona plans this is the homeowner placing the house into the trust.

Funding the Trust

The act of retitling assets into the trust. For a home, this is done by signing and recording a deed that names the trustee of your trust as the new owner.

Due-on-Sale Clause

A mortgage term that allows a lender to demand payoff after certain transfers. Federal law creates an exception for transfers to your own living trust when you remain a beneficiary and occupancy does not change. See the Garn-St. Germain Act link below.

Garn-St. Germain Act

Federal statute that limits enforcement of due-on-sale clauses for specific transfers, including moving your home into your revocable trust when you keep a beneficial interest and occupancy. 12 U.S.C. § 1701j-3.

Affidavit of Property Value

An Arizona form that typically must accompany a deed when recorded, unless an exemption applies and is stated on the deed. A.R.S. § 11-1133.

County Recorder

The county office that accepts and indexes deeds. Your trust transfer is effective against third parties only when the deed is properly recorded in the county where the property sits.

Legal Description

The precise survey description of the property, often found on the last recorded deed or a title report. It is more exact than a street address and must be correct on the new deed.

Warranty Deed vs Quit Claim Deed

A warranty deed includes title promises, a quit claim transfers whatever interest you have without promises. For trust funding, Arizona owners often use a special warranty or warranty deed, but practices vary by title company.

Beneficiary Deed, Transfer on Death Deed

An Arizona deed that names a beneficiary to take title at your death without probate. It can be used with or instead of a trust, depending on your plan. A.R.S. § 33-405.

Community Property

In Arizona, most property acquired during marriage is community property. Spouses typically join trust deeds for community property to preserve rights and clean title.

Certification of Trust

A short summary of key trust facts that third parties may rely on, used to prove trustee authority without sharing the full trust document.

Title Insurance

A policy that protects owners and lenders against covered title defects. Coverage often continues after a transfer to a living trust, but endorsements or notices may be recommended by the title company.

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