The goal of an estate planning attorney is to develop a personalized strategy that will enable you to efficiently pass your assets, including money and property, to your family. The revocable living trust and the final will and testament are the two most popular estate planning legal documents. You can designate who of your loved ones should receive your assets in one of these agreements.
However, if you have a final will and testament, your possessions will go through the probate process before being distributed to your relatives. If your will is challenged in court, this might take months or even years. Then, is it a good idea to put your house in a will?
A living trust, on the other hand, stays out of the probate court. This implies that rather than waiting months or even years to get your family their money, property, and assets after your death.
Why Do People Put Their House Into A Trust?
People put a home into a trust for two major reasons. First and foremost, they want to avoid the drawn-out, painful, and expensive probate court process so their family can inherit their home. Instead, soon after they pass away, their residence might be quietly transferred to their heirs.
The second justification has to do with preparing for disability. Contrary to popular belief, effective estate planning also considers disability when making arrangements for the future. You will designate a replacement trustee when you establish a living trust. When you pass away, they are in charge of transferring your assets to your heirs. In the event that you become incompetent and unable to speak, they are also accountable for intervening and taking over the management of the assets in your trust. You may make sure that one of your most valuable possessions will be managed and taken care of by someone you can trust in the event that you become handicapped by putting your home into a trust.
How Does Putting A House Into A Trust Work?
Your possessions must be put into a living trust to avoid probate court. This is referred to as trust money. Depending on the state you live in, you are referred to as the settlor or grantor when you establish a living trust. You name yourself as the trustee when you create the living trust. The trustee is the individual with authority to oversee every penny, item of property, and asset that is included in the living trust. You can continue to administer all the assets in your trust as you already do if you appoint yourself a trustee while you are still alive. You can still sell your house at any moment in the future, for instance, even if you want to put it into a trust.
Your revocable living trust will also contain the beneficiaries you designate. Your beneficiaries are the people you care about and want to receive your assets after you pass away. Typically, this would be a husband, kids, grandkids, etc.
What advantages of putting a house into a trust?
One of the major benefits of putting a residence into a trust is that, unlike a will, a living trust enables you to skip probate court. This had already been noted. This is significant for three key reasons.
1. Probate can be very expensive.
The legal procedure known as probate is how the court ensures that your assets will transfer legally and that your obligations will pay when you pass away. Before your assets are completely divided among your heirs, you must pay legal fees, executor fees, inventory fees (county taxes), and other expenses.
2. Probate can take a long time.
It usually takes at least five months to conclude probate. But over the previous ten years, we’ve seen that basic matters typically take 9 to 12 months to resolve (and several years for contested cases). We once handled the probate for a client whose case dragged on for eight years.
3. Probate is public.
No privacy for your family. Anyone can view your estate’s amount, your creditors, and the beneficiaries of your assets, along with the date they will distribute because probate is a public process. The procedure opens your family subject to avaricious creditors and potential scammers. It also prompts disgruntled heirs to contest your will.
Keep Your Financial Matters Private
When you establish a living trust, there is no need to disclose your assets. In a probate court, the contents of a will have been made public if it mentions only your home. The transfer’s contents remain confidential since the trust evades probate. The living trust will typically only be visible to the beneficiaries you designate. Even then, only when you have left.
A living trust can shield your family from a conservatorship if you become incapacitated while still alive. Conservatorship is the court-appointed person who has the power to handle a person’s financial affairs.