What Trust Should I Use to Pass my Home to Heirs?

Distributing a house through a trust
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Placing a home in a trust can be helpful or harmful.

Protecting wealth and distributing assets can feel overwhelming.

People worry about protecting their assets from bad life choices made by their heirs.

They also worry about tax implications and whether their heirs will be able to pay these after they have died.

According to a recent Nj.com article titled “Can I sell my house after I put it in a trust?,” how to distribute a home to heirs is a common stressor.

Distributing a house through a trust can have certain benefits.
Funding an irrevocable trust with your house means you will lose personal control of the asset.

One option for shielding this asset from creditors and lawsuits is to place it in a trust.

When creating a trust it is important to understand key differences and how these may impact your estate plan and your financial affairs.

The two primary categories of trusts are revocable and irrevocable.

With a revocable trust, the grantor retains control of the assets while he or she is still alive.

The grantor can change the terms of the trust or even terminate it prior to dying.

This affords the grantor greater financial flexibility.

Any income earned during the lifetime of the trust can be used by the grantor who commonly also serves as the trustee.

Beneficiaries only receive access to the trust funds after the death of the grantor.

Unfortunately, unless exempted by state law, trust assets can be subject to creditors of the grantor while he or she is alive and also are subject to estate taxes when the grantor dies.

With irrevocable trusts, the grantor abdicates control of these assets.

This allows the irrevocable trusts to protect assets from creditors as well as estate taxes.

Even though a home is one of the higher valued assets owned by many individuals, it may still be wise to avoid placing the house in an irrevocable trust.


If you should want to move and sell your home while you are alive, you no longer own the asset and have relinquished your ability to put it on the market, sell it,  and exempt capital gains taxes on the first $250,000  (per spouse if married).


As you can see, although trusts are beneficial, they can also be quite nuanced.

Work with an experienced estate planning attorney to discuss your options and to consider whether a trust (or which trust) best meets your objectives.

Reference: nj.com (Feb. 25, 2022) “Can I sell my house after I put it in a trust?”

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