Put My House In A Living Trust – Written by Erik J. Martin Written by Erik J. MartinArrow Right Contributor, Personal Finance Erik J. Martin is a freelance writer/editor in the Chicago area whose articles have appeared in AARP The Magazine, Reader’s Digest, The Costco Connection, The Motley Fool, and other publications. He often writes on topics related to real estate, business, technology, health, insurance and entertainment. Erik J. Martin
Edited by Michele Petry Edited by Michele PetryArrow Right Senior Editor, Home Lending Michele Petry is a senior editor at , who directs the site’s real estate content. Connect with Michele Petry on LinkedIn Linkedin Contact Michele Petry by Email Email Michele Petry
Put My House In A Living Trust
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Making And Funding A Living Trust In Texas
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When you buy and own a home, your name appears on the property title, indicating ownership. But you can transfer ownership of your residence to another person or entity in the form of an estate trust.
Why do you want to put the property in a trust? Doing so can make it easier to manage and distribute your assets, including your home, after you die. It can also have legal and tax benefits. Learn more about how a trust works, the different types to consider, the pros and cons of trusting your home, and more.
A real estate trust is a legal agreement in which the owner of a home, known as the “grantor” or “settor,” transfers ownership of the property to another entity or individual, known as the “trustee.” The trustee owns and manages the property for the benefit of the grantor and any designated beneficiaries of the grantor’s estate.
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“Putting your home in a trust simply means transferring ownership of your home into a trust that you created with a trust agreement,” says Salt Lake City estate planning and estate attorney Justin Cutler. “Transfer your home to the trust by signing a deed naming the trustee as the new owner of the property. Then, the deed must be recorded at the local county recorder’s office. Once recorded, the trustee is now “titled” as the legal owner of the property”.
Usually, the original owner of the home is appointed as administrator so that they can maintain control of the property. Or, the original owner can appoint someone else as trustee, such as a family member, friend, or attorney, which can be helpful in the event the original owner passes away. Trustees are usually the owner’s adult children, who will inherit the property upon the owner’s death.
“This is usually done to ensure that future generations will benefit from the home,” says Rob Fricker, an estate planning attorney in Milwaukee.
Trusts are often used for tax, estate planning or asset protection purposes because, depending on the type of trust, property can be protected from creditors and can pass directly to beneficiaries without going through probate court, says the attorney for Philadelphia, Min Hwan. Ahn. There are two main types of trusts that pertain to real estate: revocable and irrevocable.
Should I Put My House In A Trust?
Also often called a living trust, a revocable trust can be amended or dissolved at any time by the grantor/creator of the trust. “A revocable trust allows the grantor to maintain control over the property and make changes to the trust during their lifetime,” says Ahn. “The grantor retains the right to modify or dissolve the trust. They can act as administrators and manage the property themselves or appoint someone else to do so.
A revocable/living trust is similar to a will in that it stipulates the wishes of the original owner upon death. When the grantor dies, the property in the revocable trust is distributed to the grantor’s beneficiaries, according to the terms of the trust agreement.
An irrevocable trust, as the name suggests, is more permanent. It cannot be dissolved or modified by the grantor once created, except with the consent of the beneficiaries.
Revocable and irrevocable are the two most popular trusts used for real estate purposes, Ahn says, but there are others. These include:
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Whatever type of trust you choose, setting up an estate trust is best done with the help of an attorney. Here’s a breakdown of the basic steps involved:
Putting your property in a trust can be a smart way to ensure the smooth transfer of property to your beneficiaries after your death, protect the property from creditors and lawsuits, and avoid probate. But it can be complicated and expensive. Consult an attorney closely about your options and carefully consider who you may want to appoint as trustee before committing to a trust.
Erik J. Martin is a freelance writer/editor in the Chicago area whose articles have appeared in AARP The Magazine, Reader’s Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health, insurance and entertainment.
Edited by Michele Petry Edited by Michele PetryArrow Right Senior Editor, Home Lending Michele Petry is a senior editor at , who directs the site’s real estate content. Contact Michele Petry on LinkedIn Linkedin Contact Michele Petry by Email Email Michele Petry Senior Editor, Home Lending English.
Potential Benefits Of A Trust
When it comes to estate planning, many people create a will for their assets to be distributed after they die. But there’s another aspect of estate planning that can offer unique benefits to you and your family: a trust.
A trust is a legal contract, drawn up by a lawyer, with a named trustee that ensures that your assets are managed according to your wishes both during your lifetime and after your death.
Whereas assets controlled by yours will have to go through probate