As a New York trust lawyer, I’ve seen how storms in life can come in all shapes and sizes—health crises, divorce, or losing a loved one. And, of course, there are the literal storms: hurricanes, floods, and fires that can damage property and uproot lives. In recent months, you may have seen social media posts claiming that insurance companies won’t pay out a total loss if a trust owns your home. While it’s true insurers are more frequently scrutinizing claims, that doesn’t mean your coverage is automatically void.
Understanding the Trust-Insurance Connection
When you place property into a trust, a few key steps are needed to ensure your homeowner’s policy remains rock-solid. Perhaps the most important is listing your trust as an “additional insured” on your policy. This designation ensures the trust itself—and by extension, the individuals it’s meant to protect—are fully recognized. Skipping this step can open the door for coverage disputes if disaster strikes, so confirming your policy reflects trust ownership is critical.
Common Insurance Pitfalls to Avoid
Many homeowners make the mistake of simply changing the deed to their property without updating their insurance documentation. This disconnect between property ownership and insurance coverage can create serious problems. Another common oversight is failing to notify the insurance company when transferring property to a trust, assuming the coverage will automatically transfer. Always remember: insurance companies can only protect what they know about, so transparency and proper documentation are essential.
Keeping Your Trust Up to Date
I often see clients assume that the job is done once they’ve created a trust. But trust funding and maintenance should be an ongoing process. Every time you acquire a new asset or change your insurance provider, you’ll want to verify that your trust is accurately listed and maintained on all relevant documents. Think of it like regular home maintenance, such as checking your roof or testing the smoke detectors. These small, routine steps ensure everything is ready when needed.
Taking Action Before Crisis Strikes
The best time to review your insurance coverage and trust documentation is before you need it. We recommend an annual review of your estate plan and insurance policies to ensure they work together effectively. This review should include verifying that all property titles, insurance policies, and trust documents align perfectly.
We’re Here to Help
If you have any questions about aligning your trust with insurance policies—or if you want peace of mind knowing your estate plan is well-prepared for life’s unexpected storms—don’t hesitate to reach out to us. We’re here to protect what matters most, no matter what storm may come your way.
If you have questions or need assistance, please get in touch with us today for a comprehensive consultation. We’ll help you understand your choices and create a plan that provides security and peace of mind. Be sure to mention this article to focus on your specific needs.
This article is a service of Miller & Miller Law Group. We do not just draft documents; we ensure you make informed and empowered decisions about life and death for yourself and the people you love.
