Benefits of Putting a House in a Trust
As you consider long-term estate planning, understanding the benefits of putting your house in a trust is essential.
A trust can provide peace of mind, protect your assets, and simplify the property ownership transition to beneficiaries.
Let’s break down how a trust works and why it’s important.
What Is a Trust and How Does It Work?
A trust is a legal arrangement where a designated trustee holds your property on behalf of beneficiaries. When you put your home into a trust, you retain control of the property while ensuring that it is transferred seamlessly to your children or other chosen beneficiaries.
Unlike a will, a trust avoids the lengthy and often expensive probate process, making them a popular choice for estate planning.
Key Benefits of Putting Your House in a Trust
Avoid Probate
One of the most significant benefits of putting your house in a trust is bypassing probate. Since trusts operate differently than a will, the property is transferred directly to your beneficiaries without needing approval from the court. This saves your loved ones a lot of time, money, and hassle.
Privacy
Wills can become public record during the probate process, but trusts remain private. This extra layer of privacy protects sensitive details from becoming easily accessible.
Tax Reduction
Depending on the type of trust you set up, putting your house in a trust can also help reduce estate taxes, saving your loved ones money in the long run.
Protection for Beneficiaries
If you have children or beneficiaries who might not be able to manage a house or other property, a trust gives you the ability to control terms surrounding control of the property.
How to Put You House Into a Trust
Setting up a trust involves choosing the right trust for your estate planning needs. Overall it should be a smooth process. Here’s a how to put a house into a trust:
Choose the Right Type of Trust
There are different types of trusts, including revocable and irrevocable trusts. Work with your estate planning attorney to determine which trust is right for you.
- A revocable trust allows you to retain control over your assets and make changes as circumstances change throughout your life.
- An irrevocable trust transfers full ownership. It cannot be changed without the beneficiaries’ consent.
Select a Trustee
The trustee is the person (or designated institution) responsible for managing the trust. In many cases, you are the initial trustee and remain in control over the property until you pass away. A designated successor will manage the property after you are no longer able.
Transfer the Title of the House to the Trust
Once your trust is created, transfer ownership of your house or property into it. You have to prepare a new deed that lists the trust as the property owner and file it with the local recorder’s office.
Get a Professional Real Estate Valuation
Having your home valued is crucial when placing it into a trust. The property’s fair market value is essential for tax purposes, especially if you’re using an irrevocable trust. Additionally, a real estate valuation ensures beneficiaries know the property’s worth so they can make decisions about selling or keeping the home.
How Real Estate Valuations Can Help When Putting a House Into a Trust
A professional real estate valuation is an important step in the trust process. Here’s why:
- Accurate Value: Knowing the value of the property helps you and your beneficiaries with tax planning and fair asset distribution.
- Simplifies Future Property Transactions: When the time comes for your beneficiaries to take ownership of the home, a valuation makes it easy to decide what to do with the property, whether that means selling, renting, or living there.
- Tax and Legal Benefits: Accurate home valuation can reduce disputes during estate settlement and provide a clear financial picture for estate tax purposes.
Akrivis is Here to Help with Estate Planning
If you’re ready to take the next step, contact us today for a professional valuation of your property. We can help make the trust process easier and more informed for you and your family.