Avoiding "Due on Transfer" in Trusts: Structuring Transfers to Avoid Triggering Acceleration Clauses

A Real-World Guide to Garn-St. Germain Act Exemptions

Recording of a 90-minute CLE webinar with Q&A

Conducted on Tuesday, April 9, 2019

Recorded event now available

or call 1-800-926-7926
Program Materials

This CLE webinar will provide estate planners and trust attorneys with comprehensive guidance on accomplishing transfers of encumbered real property to a revocable living trust without triggering "due-on-sale/due-on-transfer" mortgage provisions. The panel will discuss how the Garn-St. Germain Depository Act exclusions operate in the real world of trust and estate planning practice and will offer practical tools for structuring transfers and drafting trust language to avoid acceleration clauses in mortgage notes.


Almost every mortgage agreement on real property contains a "due-on-sale/due-on-transfer" clause, which gives the lender the option to demand payment in full of the amount due on the loan under certain circumstances, such as if title to the property is transferred to another party without the advance written consent of the lender.

A notable exception to the enforceability of these provisions is found in the Garn-St. Germain Depository Institutions Act, which exempts transfers of certain residential real property from enforcement of the due-on-sale provisions. While the Act has been law for over 30 years, estate planners and attorneys face challenges in applying the provisions of the exemption.

The Act protects transfers of certain real property "into an inter vivos trust in which the borrower is and remains a beneficiary and which does not relate to a transfer of rights of occupancy in the property." However, transfers to other persons or entities often do not receive statutory protection from the due-on-transfer requirements, and in some scenarios, the treatment is not certain.

For example, would a transfer of the property into a single member LLC where the borrower is the sole member give the lender the option to call the note immediately due and payable?

To protect a client's real property assets, estate planners and counsel must have a clear understanding of what property is eligible for the exemption, how to draft trust documents for a qualified trust, and how to structure transfers of the property into not only trusts but LLC structures.

Listen as our experienced panel of estate planning counsel and real estate lawyers provides a real-world guide to structuring trusts to protect residential real property assets from acceleration clauses in mortgage documents.



  1. History of the due-on-sale clause and the Garn-St. Germain Depository Institutions Act
  2. A brief definition of due-on-sale/due-on-transfer provisions
  3. Exceptions that the Garn-St. Germain Depository Act provides to the due-on-transfer provisions
  4. Drafting revocable living trust documents to hold encumbered real estate
  5. Structuring the transaction to avoid the acceleration provision
  6. Transfers into single-member LLCs


The panel will review these and other key issues:

  • What are the specified transfers exempt from enforcement of due-on-sale/acceleration clauses as they relate to estate planning?
  • What are the practical requirements that a trust must have to ensure that a transfer of qualified property does not trigger an acceleration clause?
  • What are the specific traps that trust counsel must avoid in structuring a trust transaction?
  • Sample language for trust documents


Bronchick, William
William Bronchick

Principal Shareholder
Bronchick & Associates

Mr. Bronchick specializes in all forms of asset protection and is a nationally-known attorney, author, and speaker. He...  |  Read More

Bybee, Brendan
Brendan Bybee

Rushforth Lee & Kiefer

Mr. Bybee is a Senior Attorney in Rushforth Lee & Kiefer’s Estate Planning Group. He graduated with honors...  |  Read More

Bill Goldberg
Bill Goldberg

Mr. Goldberg has specialized in real estate and business transactions for over 20 years. He is also a frequent speaker...  |  Read More

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