Openai/68c0d285-6e64-800d-b9ab-406491665f7f

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gpt-5

User: Does property need to be paid in full before putting into a trust?

Does property need to be paid in full before putting into a trust?

Assistant: Great question!

Great question! The short answer is no—a property does not need to be paid in full before you place it into a trust.

Here’s how it usually works depending on the situation:

• If the property has a mortgage: You can still transfer ownership of the property into a trust while you’re making payments. The trust will hold title, but you’ll still be responsible for the mortgage. Lenders generally allow this, though some may have a “due-on-sale” clause. Most commonly, if it’s your primary residence and you’re placing it into a revocable living trust, federal law (the Garn-St. Germain Act) protects against triggering that clause.
• If the property is paid in full: The transfer is usually simpler, since there’s no lender involved. You just deed the property into the trust and record that deed with your county.
• If you’re considering asset protection or Medicaid planning: The type of trust (revocable vs. irrevocable) and whether the property is paid off can matter. A revocable trust won’t shield the home from creditors or Medicaid spend-down rules, but an irrevocable trust might (with some restrictions).

👉 Do you want me to walk you through the steps of how to transfer a property with a mortgage into a trust so you can see what it looks like in practice?