Placing your home in a trust can provide you with more control over your estate and can help you avoid the costly and lengthy process of probate. The most popular reason to place assets in a revocable living trust is to avoid the legalization of probate. This process is a matter of public record, but the transfer of a trust from a grantor to a beneficiary is not. The biggest advantage of putting a house in a trust is that, unlike a will, an active trust allows you to avoid probate court.
This can save your loved ones the costs associated with it, which can amount to up to 3 percent of the value of your asset. Placing your assets in a trust also keeps some of the details of your estate private. Putting your house in a trust is not the same as selling it or giving it to someone else. It will not generate an “expiry at the time of sale” clause. The two most popular trusts used for real estate purposes are revocable and irrevocable, but there are others.
The two most common estate planning documents are the will and the revocable living trust. Placing the property in a revocable trust will not affect the exclusion from the sale of personal residential housing or the deduction of mortgage interest. A revocable living trust gives a family one less problem to face when someone becomes incapacitated. Because you can access the trust's assets at any time, a revocable trust doesn't provide asset protection from creditors or remove the home from your taxable estate in the event of your death. Once again, remember that the main benefit of placing your home in a revocable trust is to remove the asset from your probate estate. When you die, the revocable trust becomes irrevocable and the successor trustee will assume control and manage the trust according to your instructions.
When the grantor dies, the assets of the revocable trust are distributed to the grantor's beneficiaries, under the terms of the trust agreement. As its name implies, a revocable living trust can be modified, dissolved, rescinded, etc. Placing your assets in a revocable living trust allows you to protect what is yours and, at the same time, provide for your loved ones in the future.
