Posted by Bill Gatten on March 19, 2000 at 12:28:32:
A PACTrust™ leaves the hazard insurance in the name of the settlor beneficiary (the first non-resident bene.), who continues to hold “some” percentage of beneficiary interest in the trust throughout the trust term for THAT very reason (averting the insurance problem) among many others (e.g., DOS issues, voting right transfer, property tax reassessment, etc).
The PACTrust Possessory Agreemnt provides for an aggregate monthly payment being made to a collections entity, which entity impounds insurance, taxes, interest and principal: paying such items when due. At inception, hazard insurance is converted to landlord coverage (non-occupanty owner insurance)and the resident co-beneficiary obtains his/her own contents coverage for furniture and fixtues (all such monthly premiums being paid out of the aggregate monthly triple-net lease payment).
Hope this helps.
Bill Gatten