Putting your house in a trust can be a great way to protect it, ensure that assets are passed on efficiently, and give you peace of mind. But there are certain steps you’ll need to take before putting your house in trust, as well as some factors to consider that may influence the process.
What are the Benefits of Putting a House in Trust?
Putting your house in trust can offer numerous benefits and is a useful tool if you want to help simplify the process of passing on your property after you die. Benefits include avoiding probate costs, protecting assets from creditors or lawsuits, and allowing the trustee flexibility with the sale of the home. Additionally, it may reduce or even eliminate estate taxes.
How Do You Put a House in Trust?
The process is relatively straightforward. First, you need to choose a suitable trustee and create a revocable living trust, assigning yourself as the grantor or “owner”. Then, should re-title your house to the trust. You do this by recording a deed transferring it from your personal name to yourself as trustee of your revocable living trust.
There are details that we are not describing. For example, here in Arizona you use a Special Warranty Deed to transfer your house to your trust. However, I don’t know how if you currently own your house. Is it in joint tenancy? Does anyone else need to sign? Did you promise the house to someone already (creating an issue about who it entitled to your house)?
A great resource is First American Title. They are the largest title company in the U.S. and can probably answer your question. Otherwise, if you don’t know what to do, call us at 602-443-4888. We’ll refer you to someone who can help.
What Are the Necessary Legal Documents Required?
When putting your home in trust, the documents you need vary depending on the individual laws of your state. Before proceeding, consult a qualified attorney. He or she can to make sure all necessary legal steps are being carried out properly. Generally speaking, you’ll need to have the following documents to complete your house trust: a Certificate of Trust, and a transfer deed.
If you don’t know what to do, call us at 602-443-4888. We’ll refer you to someone who can help.
What are the Tax Implications?
Taxes are an important consideration when putting your house into a trust. Generally speaking, when placing a home into a trust, the tax benefits available depend on the type of trust that is created. For instance, revocable trusts allow for beneficiaries to transfer assets tax-free and may help to avoid certain estate taxes. Additionally, certain trusts can provide additional tax savings due to their ability to reduce taxable income or defer taxes until distributed. It’s important to speak with a qualified estate plan attorney about the potential tax implications of putting your house into a trust.
How Does Setting Up a Revocable Living Trust Differ from Putting Your House in Trust?
When putting your house into a trust, you essentially transfer ownership of your property from yourself to the trust. Through this process, the trustee of the trust (usually you) can be legally bound to manage the trust assets. The trustee will manage everything according to the terms set forth in the documents. A revocable living trust allows for a grantor (i.e., yourself) to retain control over and access their assets held within the revocable living trust. The agreement also outlines who is inheriting assets after death or incapacity and details when distributions may be made from the trust.
If you want to put your house in a trust, give us a call at 602-443-4888. If we can’t help, we’ll refer you to someone you can trust. We just want to help.