A living trust is a vehicle for transferring your assets to heirs and beneficiaries after your passing. You can fund your trust with various pieces of property, including your home. But is it a good idea to put your house into a trust? The answer depends on your current situation and goals for your future. That said, in this blog, we will discuss some of the advantages and disadvantages of putting your home in a trust.
What Does a Living Trust Do?
Before explaining the advantages and disadvantages of putting your home in a trust, let’s first review what this vehicle is. A living trust allows you to specify to whom you want your property to be distributed after your death. It enables you to assign someone as a successor trustee who manages your assets should you become incapacitated.
When you invest property into your trust, including your home, it is funded in the name of the trust, but you don’t lose control over it. As a trustee, you can continue to manage your assets as you would had they not been placed in a trust.
The Advantages of Putting Your Home in a Living Trust
Two significant advantages exist to putting your home in a trust. It prevents your heirs from going through the probate process when distributing the asset. It also ensures that your property is managed appropriately if you cannot do so yourself while you are living. Let’s explore both of these a bit more.
Probate is a legal process through which a person’s estate must pass upon their death before the property is distributed to heirs and beneficiaries. If the decedent has a valid will, their assets will be distributed accordingly. Otherwise, the distribution is done according to state laws. Probate is required when a person has a will or dies intestate (without a will). It is not necessary when a person’s assets were invested into a living trust.
By putting your home in a living trust, you can:
- Save time: Probate is lengthy. Depending on the size of the estate and whether issues arise, it can take 6 months or more. Generally, with a living trust, assets can be transferred to heirs rather quickly. It takes substantially less time than it does for property to go through probate.
- Save money: Because probate is a legal process, various fees may arise, such as the cost of an attorney or other experts. With your home in a living trust, you can help your heir avoid hefty legal fees.
- Keep your matters private: When an estate goes through probate, the process details are public record. That means anyone can get information about the size of your estate. If you have a living trust, details about your assets remain private.
Protecting Your Home
With a trust, you name a successor trustee. The individual steps in not only to pay debts and distribute your property upon your passing; they can also manage your assets if you cannot do so yourself because of incapacitation.
Putting your home in a living trust gives you peace of mind knowing that someone you can depend on will take care of your house. Without a trust, the court may name a guardian to manage your estate. The individual they appoint might not be someone you feel comfortable taking care of your property.
Disadvantages of Putting Your Home in a Trust
Putting your home in a trust has a couple of disadvantages. You must complete paperwork and sign a new deed to ensure that your house is appropriately funded into it.
Additionally, you will incur certain costs to set up and maintain your trust.
What Path Should You Take
Ultimately, the decision of whether to put your house in a trust depends on your goals. One of our Fort Myers attorneys can help you fully consider the pros and cons and discuss the various options for managing your estate. By answering your questions and addressing your concerns, we can help you make informed and confident decisions about your path forward.
To schedule a free consultation with Dorcey Law Firm, please call (239) 309-2870 or submit an online contact form today.