Advantages & Disadvantages of Putting a House in a Trust

by Amanda McMullen ; Updated May 01, 2018

When you have a home, you want to make sure it goes to the person you want it to, as effortlessly as possible, after your passing. To avoid probate, estate taxes or attachment from creditors, consider placing valuable property, such as a home, into a trust for protection. Depending on your desired outcome, you may place your property in either an irrevocable trust or a revocable trust. However, you must keep in mind that transferring your home to either type of trust has both advantages and disadvantages.

Advantages of a Trust

If you place your home into a trust, it won't pass into your probated estate when you die. Your designated beneficiary can receive the property immediately without the hassle of waiting for the costly probate procedure, and he can also sell the property without obtaining approval from the court. Depending on the type of trust, it may also protect your home from estate taxes. Since a home is one of your more valuable assets, avoiding estate taxes on the home can save your estate a substantial amount of money. Some trusts also protect your home from the collection efforts of creditors.

Trust Disadvantages

Creating a trust does requires more time and effort than including your home in a will because you must complete extensive paperwork and transfer ownership of your home to the trust. Depending on the type of trust you create, you may lose control of your home after you transfer its ownership. There are also certain tax breaks available to probated estates that aren't available to trusts, such as the ability to choose to pay taxes based on the fiscal year instead of the calendar year.

Revocable vs. Irrevocable

If you create a revocable trust, you can retain full control over its property, and you can remove your home from the trust or change the beneficiary at any time. However, revocable trusts only offer protection from probate proceedings and don't exempt the home from estate tax or attachment by creditors. Irrevocable trusts do exempt the home from estate tax and collection efforts, but you can't change the terms of the irrevocable trust after you create it.

Considerations

If you and another individual own the home jointly, you don't have to place the home in a trust avoid probate when you die. However, if you don't want her to inherit your share of the home or if you are worried that she won't create a trust after you die, placing the home in a trust may be beneficial.

Video of the Day

Brought to you by

References

About the Author

Amanda McMullen is a freelancer who has been writing professionally since 2010. She holds a bachelor's degree in mathematics and statistics and a second bachelor's degree in integrated mathematics education.

Cite this Article | raiffeisen-cards.ru A tool to create a citation to reference this article Cite this Article

Related pages


what is the tax amount on lottery winningscosigning on a mortgageamerican eagle store manager salarycore deposits definitioncan you pay for petrol with a credit cardcalvet home loansirs rules for claiming a dependentsenior unsecured debtred cross cpr certification cardis it illegal to cash a post dated checkhow to add tradelines to your credit report yourselfarkansas tax bracketshow do bearer bonds workaetna dmo coveragewhat percentage of your paycheck goes to taxesdefinition of cvp analysisrenter verification formdefine predeterminationhow do i get a replacement cpr cardconverting 403b to roth irasublet lawsplpd insurance rateslapse in car insurance coveragecredit card scanners theftreload my netspend card onlineebay buyer protection carsmissouri 1099 formtrack arkansas state tax refundhow to calculate monthly installment for loanbest way to insure a young driversection 8 eligibility njwhen do w2 have to be mailed outconvert savings bonds403b early withdrawal penalty calculatorscholarships for chinese adopteesgeorgia medicaid income limitstax treatment of ira distributionsvisa vanilla debit card balancecanperdonate microwavedda withdrawaldhs snap applicationnon cumulative dividendsuop login pagecollision deductible definition674 credit scorecusip licenseaverage length of nursing home stayvirginia income tax withholding calculatorannuity vs perpetuitysection 8 housing eligibility njcan you electronically transfer money from one bank to anotherdeductible vs coinsurancebank of america debit card phone numberafrican american womenstudent loan default cosignerare house deeds public recorddiscover atmswells fargo routing number californiarailroad retirement benefits for widowswhat does medi cal cover for visioncalculate payroll deductions canada1040 alternative minimum taxapply kohls chargehistorical pe ratio for stocksat&t go phone 1800 numbergold price 14k per gramwww gapcard comstatute of limitations on credit card debt in ohiocheck georgia state tax refundex dividend price calculationw-4pcarmax title loanmy fed loan defermentam i judgement proofcan i file my taxes before i get my w2withdrawing from mutual fundcalculate beta of a portfoliowhat does a 730 credit score meanaarp medicare advantage hmocommissary privileges for disabled veteransnevada lease laws