April 20, 2022

Vacant Real Estate Properties Inside Trusts and Estates

In our role as professional trustees and fiduciaries, at Hitchman Fiduciaries we are often tasked with overseeing real estate that is vacant and managing those properties that are inside a trust or probate. Below are insights we have learned along the way, considering we frequently have vacant properties included in our clients’ assets.

It does not matter whether a property is a decedent’s former primary residence, their second home, or rental property, we are often responsible for dealing with real estate that is not currently being occupied by anyone. And these vacant properties require unique actions to protect them. Research and knowledge about how to ensure these types of properties is often overlooked.

When onboarding new clients, we often find there is an assumption that vacant properties are fully covered by their regular homeowner’s policy or property owner’s policy. It is true that certain traditional homeowners’ policies do sometimes accommodate a short-term vacancy with a “vacancy endorsement” on the policy— in most cases a regular policy will limit, restrict, or potentially even deny coverage for vacant property. And it can be absolutely devastating to find out your claim is denied because the property is vacant. If we think about it from the insurance company’s perspective, it is not unreasonable, considering a vacant home is more likely to experience undetected leaks or be vandalized. 
 
What needs to happen to cover vacant properties properly? The best answer to this question is to obtain vacant property insurance policies. This article will highlight why regular homeowner and property owner policies may limit or restrict coverage for vacant properties, summarize what vacant property policies cover and do not cover, and will provide helpful tips to consider when you are looking for a vacant property policy to protect your property. 

Author: Lee Ann Hitchman, CLPF/MBA and Licensed Professional Fiduciary