Placing real estate in a trust can be a good idea for some people.
Not everyone owns real estate.
Some individuals choose to live their entire lives in apartments to minimize their responsibilities at home when not at work.
Others lived in a home but sold it after their children left for college or the workforce.
Even so, there are still many individuals who own a house, land, or another building.
According to a recent Yahoo Finance article titled “What Is a Living Trust in Real Estate?,” there are several options available for managing these assets while you are alive and transferring them when you die.
One of these is to utilize a revocable living trust (RLT).
What is a RLT?
It is a legal document created for the express purpose of holding and managing assets.
The trustee is appointed to oversee these responsibilities in accordance with the directions outlined in the trust.
If you create a RLT, then you can serve as the trustee while alive, but you will need to designate a successor trustee to take over the role if your become incapacitated and when you die.
By placing real estate into a RLT, you can simplify the passing of the property to your heirs through bypassing probate proceedings.
Because probate can take months to years, you could save your heirs many complications.
While assets are in probate, they may be frozen until the estate is settled.
This can be especially complicated for real estate.
During probate, your family may not be able to use, manage, or sell the property.
The executor will carry the full responsibility for all maintenance, taxes, bills, and repairs in the midst of also settling your estate.
In addition to simplifying the upkeep and transfer of your real estate when you die, a living trust can help your heirs manage the asset wisely.
Few individuals in their early 20s know what to do with a large inheritance.
With a trust, you can incorporate timelines, rules, and stipulations for the inheritance.
As a result, your children are better equipped to handle these assets.
Privacy is an additional benefit of using a living trust.
Probate documents are filed with the court and anyone can access them.
If you want to keep your real estate and other assets from the eyes of curious individuals or estranged family members seeking to contest a last will and testament, a trust can help you do so.
Ultimately, a RLT gives you more control.
As the trustee, you are still able to move the real estate into or out of the RLT while you are alive.
Since your trust is “revocable,” you can also make changes to the trust itself or even cancel it.
Work with an experienced estate planning attorney to determine if you should fund a RLT with your real estate property.
Reference: Yahoo Finance (Oct. 7, 2021) “What Is a Living Trust in Real Estate?”