Placing your house in a revocable trust can provide you with more control over your estate and help you avoid the lengthy and expensive probate process. The most popular reason to place assets in a trust is to avoid the legalization of probate. The main benefit of putting your house in a trust is to prevent probate legalization when you die, as all of your other assets, regardless of whether you have a will, will go through the probate process. One of the key advantages of trusts is that they keep your estate information private.
The public succession process allows anyone to see the value of their assets. By placing your assets in a trust, this information is kept out of the public eye during probate legalization. Additionally, a trust can transfer ownership of a home faster than if it were to go through probate proceedings. A trust can be revocable or irrevocable.
A revocable trust allows you to make changes to it at any time, while an irrevocable trust is permanent and cannot be changed or removed. Placing your assets in a revocable living trust gives you the power to protect what is yours and also provide for your loved ones in the future. Without a trust, distributing your assets could take months or even up to a year, with an estimated cost of 3% to 7% of the estate's value. When your family is grieving your death, the last thing they want to deal with is any unnecessary financial or legal burden.
It's best to hire an attorney who specializes in trusts to handle the transfer of title to your home to the trust. Revocable and irrevocable are the two most popular trusts used for real estate purposes, but there are other options. Since the assets of a living trust prevent probate legalization, your home, bank accounts, stocks, bonds, and other prized possessions can be passed on to your loved ones without any hassle. When you die, a revocable trust becomes irrevocable and your successor trustee will take control and manage the trust according to your instructions.
If you are appointed as a trustee, as is usual with revocable trusts, you can also designate a successor trustee who will step in when you die or are no longer able to manage the trust. Generally speaking, revocable trusts are still subject to estate taxes and do not protect your assets from creditors. Yes, you can put a mortgaged home in a trust; in fact, it's common practice, especially when it comes to a revocable trust. If you are planning on refinancing soon with either a rate and term or cash withdrawal, however, you may want to postpone creating your trust.
When the grantor dies, the assets of the revocable trust are distributed to their beneficiaries according to the terms of the trust agreement. Placing your home in an irrevocable trust means that you give it up and withdraw from your estate.
