Can I get a reverse mortgage if my home is in a trust?

Which trusts work with a reverse mortgage?

	HECM (FHA-insured)	Proprietary (jumbo) reverse
Revocable living trust	Generally eligible once the trust meets HUD's review; the home can stay in the trust	Generally eligible
Irrevocable trust	Generally not eligible	Some programs may allow it

Your estate attorney should review the trust documents before you apply, and we'll send them to the lender early so there are no surprises.

What else should be in place?

• A successor trustee: the person who takes over the trust and deals with the loan after you're gone.
• A durable power of attorney: someone who can act for you if you can't.
• Clear instructions for the home: whether your heirs should keep it, sell it, or decide for themselves.

Put these in place now, while everyone is healthy. It makes counseling, closing, and the eventual payoff much smoother.

How does a trust help my heirs?

With a properly drafted revocable living trust, your heirs can decide: keep the home by refinancing it or paying off the loan (on a HECM, for the lesser of the balance or 95% of the appraised value), sell it and keep the remaining equity, or walk away if it's worth less than the loan. See what happens when the borrower dies.

What should California families know about Prop 19?

Before 2021, parents could pass their low property-tax value to their children fairly broadly. Under Prop 19, the family home keeps its low tax value only if a child makes it their primary residence, and only up to a value limit. If your heirs won't live in the home, their property taxes would reset to market value, so selling it and repaying the loan may make more sense than keeping it. That's worth knowing before you plan around the house staying in the family. Rules and limits adjust periodically, so confirm with your estate attorney.

Example scenario (illustrative)

A couple in their mid-70s in Mission Viejo hold their home in a revocable living trust, with their daughter as successor trustee. Their attorney reviews the trust, the lender approves it, and the home stays in the trust. Their daughter lives in Texas and won't move back, so the family agrees in advance that she'll sell the home and keep what's left after the loan is repaid.

Our take

My recommendation is always the same: bring your heirs to the table. Have your estate attorney, your financial advisor, your kids, and me in the same conversation, even if it's one call. When everyone understands the plan, there are fewer surprises later.