Your home is likely the most expensive asset you own. Not only does your home have a lot of financial value, but for many people, the home also has significant emotional and sentimental value. Because of this, you might want your home to stay with your loved ones after you pass. One common way of passing down your home is to leave it to someone in your will. However, for some, trusts are a better estate planning tool than wills, especially when it comes to high-value assets like your home.
How Does Putting Your Home in a Trust Work?
There are various types of trusts that work in different ways. Some might think that putting their home in a trust while they’re still alive means they have no control over it anymore. However, this isn’t the case with the proper trust. With a living revocable trust, you can create the trust and name yourself as the trustee. As the trustee, you maintain control over the assets in the trust, so you can continue to live in your home and do what you want with it. When you pass away, the trust will become an irrevocable trust, your successor trustee will distribute the assets in it to your heirs.
Pros
Avoid Probate
One of the main reasons people choose to put their assets in a trust is so their loved ones can avoid the probate process. This can be lengthy and cause them to wait much longer to receive their inheritance. If you want your loved ones to get your home shortly after your death, placing it in a trust can be much more beneficial. Probate can also be costly and the information from this process is made public. A trust allows your loved ones to bypass all of the negatives of going through probate.
Pass Down Out-Of-State Property
Some may have property in another state, such as a vacation home. Tennessee residents are fortunate to have no estate or inheritance taxes, but this isn’t the case for other states. Passing down property from another state can be complicated and costly, but putting out-of-state property in a trust can help make it easy to give to your loved ones.
Protect Your Property if You Become Incapacitated
Many of us don’t consider what will happen if an accident or illness occurs that leaves us incapacitated. You can never guarantee that this won’t happen, but a trust can protect you if it does. You may be the trustee, but by naming a successor trustee, you have someone you trust in control of your property should you become incapacitated.
Cons
Trusts Can Be Complicated
Many people misunderstand trusts, as they can be complicated. Even if a trust is right for you, the complexities of these documents might keep you from going through with creating one. While trusts are more involved than wills, you aren’t expected to do this alone. An experienced trust attorney can walk you through this process to help you determine if a trust fits your needs and help you establish one.
Other Assets May Still Go Through Probate
Putting your home in a trust doesn’t mean your loved ones will be able to avoid probate altogether. While your home might be your most valuable asset, it isn’t your only one. Your other assets may still need to go through probate. If this is something you want to try to avoid, an estate planning attorney can discuss your options.
Have MHPS Help Plan Your Estate
Knowing the best way to distribute your assets to your loved ones can be difficult. You want them to get as much as possible from your estate, which is why you need an estate planning attorney with experience. At MHPS, we can help you find the best way of distributing your assets and ensuring your wishes are followed.
Contact us today for assistance with estate planning.
