|Moving on…keep reading:
I have an irrevocable trust with you for over six years with a mortgage on my home in the trust. Can my trustees or I sell this unit and purchase a different home? How does the look-back work? The present mortgage is about $90,000.
These are questions that we get all the time. The trustee is able to sell the house and buy another house at any time. Since no new asset was TRANSFERRED into the trust by you, no new look-back is started. Changing from one asset to another asset within the trust does not create a new look-back. Period!
The trustee can sell the house and pay off the mortgage, and then purchase another house. The only problem I foresee here is if the trust needs a new mortgage on the new purchase. Not many banks will issue a mortgage for a house in an irrevocable trust. I do know of a few banks that will but your choices will be limited. If the second house is purchased for cash (no mortgage), then I see no problems.