Property Placed in a Trust

March 28, 2011

I have several clients whose property has been placed in a living trust. They own nothing. Their trust owns all their property and they serve as trustees. Who should be the insured under the homeowners, auto, and personal umbrella liability policies now issued in the individual names? Should the policies be issued in the name of Mr. X, the individual, and in Mr. X, trustee of his trust? Likewise for Mrs. X, the individual, and Mrs. X, trustee of her trust? With the above wording, will these policies work to protect non-business assets placed in the trust under homeowners, auto and personal umbrella forms?

  Oregon Subscriber

The problem with trusts is that the policy considers "you" in the policy the first named insured and spouse; trusts don't have spouses, and aren't people. The homeowners policy is designed for individual owners of a property, not a legal entity. You need to use the HO 05 43 Residence Held in Trust endorsement. This defines the trustee as the named insured. For the auto policy, the PP 13 03, Trust Endorsement is needed. The umbrella form is the DL 98 08, Personal Umbrella Liability Policy Trust Endorsement. These endorsements are the only way to properly cover property that is in a trust.