When Should You Put Your Home in a Living Trust?
2023-04-18
Posted at 06:55h
in Asset Protection, Living Trusts
Whether or not you should put your home in a trust is a common estate planning question. There is no one-size-fits-all answer to the question, because it depends on your circumstances and your goals. But placing real estate in a trust can have many benefits, such as avoiding probate. Here’s why you should consider placing your home in a revocable living trust.
What Is a Living Trust?
A trust is a legal arrangement where your designated trustee holds and manages the trust assets on behalf of the beneficiaries. There are many different types of trusts, but the most common is a revocable living trust. With a living trust, you can place assets such as your home in the trust and retain control over them during your lifetime. You can also revoke or amend a living trust at any time.
When Should You Put Your Home In a Living Trust
So when is the best time to put your house in a trust? Here are some circumstances where it may be the right choice for you:
1: You Want to Avoid Probate
Probate is the long and costly court process of distributing your assets after you pass away. Any assets held in a trust automatically transfer to the beneficiaries according to the trust’s instructions after your death, without the need for probate. Real estate does not avoid probate on its own, so it’s important to place your home in a trust to save your loved ones the burden.
2: You Want to Plan for Incapacity
Estate planning isn’t just about preparing for what happens after you pass away. It can also help you protect your assets in the event of your disability. If you are unable to manage your affairs due to illness, injury, or cognitive decline, your trustee has the authority to manage them on your behalf. Placing your home in a living trust ensures that your home will be managed and maintained according to your wishes.
3: You Want to Provide for Your Beneficiaries
If you don’t place your house in your will or in a trust, then it will pass to your next of kin according to the laws of succession. A trust not only ensures that your home goes to the beneficiaries of your choice, it also gives you more control over the transfer. Unlike a will, a trust allows you to leave instructions for exactly how and when to transfer ownership of the property.
How to Place Your House in a Trust
To place your home in a trust, you first need to create a trust. Next you will need to name a trustee, decide on the terms of the trust, and sign the trust agreement. Then you need to transfer ownership of the property to your trust. Finally, you will need to send the updated deed to the county recorder’s office.
Set Up a Living Trust Today
If you’re considering placing your home in a living trust, contact the Phelps LaClair team. We’ve been helping residents in the Phoenix Metropolitan Area protect their assets with living trusts for over 40 years. We’ll help you set up and manage a living trust that successfully transfers your home to your loved ones without the hassle of probate. Call us at 480-892-2488 today to schedule your free consultation.
Images used under creative commons license – commercial use (4/18/2023).
