[greglepore]

As a practical matter, it would make more sense for the trust to own the house than the child. The child has no assets and can't buy the house-the trust can. This would allow a refi at the current low rates. It makes no sense to pay off the house with rates below 3%. It is fundamental that a trust can own real estate. When does the trust terminate? At 18 or later?

As a practical matter, if the parent is the trustee and mutually supporting both child and themselves, so long as there isn't self dealing (ie European vacations for just mom) no one is likely to question the actions of the trustee. The only scenario where this happens is where there is a beneficiary down the road that feels their assets were squandered.