Is it a Good Idea to Place Your Home in a Trust?

September 20, 2020

A revocable or irrevocable living trust is one of the most common estate-planning documents in use today, second only, perhaps, to a Last Will and Testament. Like a Will, a trust can distribute certain assets to your heirs upon your passing. There are some situations, though, where it makes more sense to place an asset into a trust instead of designating in it your Will.

For larger assets, like real estate, it can be especially advantageous to use a trust instead of a Will for estate-planning purposes. A common question from estate planners is whether or not it makes sense to place their homes into a trust. This blog will explore some considerations to address in this important area.

What are the Advantages of a Trust?

Even with a Will, your heirs will have to spend some time (and money) in probate court. Though the process may be simplified if this is the case, you still risk losing a portion of the estate’s value when it enters probate court. A trust generally avoids probate court altogether; as a result, beneficiaries receive their inheritances in a matter of weeks instead of months (or years).

There are other advantages of a trust. While the contents of a Will is public record, the trust (and assets within the trust) are kept private. Additionally, there may be tax benefits to placing a house in a trust, though this varies wildly depending on your specific circumstances.

Are There any Disadvantages to Placing a House in a Trust?

As with any assets that are placed into a trust, there is a significant amount of paperwork involved. This mainly has to do with drawing up a new title and transferring it to the newly created trust. With an experienced attorney, though, the overall process is manageable and not exceedingly difficult.

Despite what some mortgage lenders claim, it is usually possible to refinance a home that has been placed in a living trust. Some lenders balk at extending loans to properties held in a trust, however. For the ones who will acquiesce, copies of the trust will likely be required. Generally, though, as long as the trust is set up correctly, the trustee (the trustor in a living trust) can sell or refinance the home with minimal friction.

Let Us Review Your Situation

No two estate plans are alike. Because each situation is unique, you need to consult with an experienced professional to ensure your goals and objectives are met. Schlegel Livingston, LLC is uniquely positioned to help you determine whether or not your real estate should be placed in a living trust. We would be honored to help; please get in touch with us through our website today here or call us at 954-771-8929 to receive a free consultation!