Why Put A House In A Trust?
One major benefit of placing your house in a trust is that it avoids probate following your passing away. Each of your other assets, if you have a will or not, are required to go through the probate process.
Probate is a legal process that your estate goes through following your passing away. Throughout this process, your assets are going to be used to finalize any debts or taxes owed by you, and the remainder of your property is going to be distributed stipulated by your will. If you pass away without a will, your property is going to be distributed stipulated by your state’s laws concerning intestate succession.
Probate can be a drawn-out process. Basic estates could be completed in just a couple of months, but those with larger estates or complicated situations could have a probate process that lasts an additional one or two years. When your will is challenged, it could take even longer. It can also be costly when you consider all the various court fees, legal costs, and administrative fees.
When you place an asset into a trust, you’ll usually designate yourself as the. You are also going to designate a successor trustee that is going to take over when you pass away. At which point, your chosen trustee is going to be responsible for adhering to the instructions of the trust and allocating the assets in the trust to your selected beneficiaries. This can provide you with peace of mind knowing that ownership of your home is going to be passed to the individual you designate immediately following your passing away (or dependent on whatever terms you specified in your trust agreement), without your beneficiary needing to wait to endure a lengthy legal process first.
As well as providing a plan for your home following you passing away, placing your house in a trust is also able to help safeguard this important asset should you become debilitated.
What is a Trust?
A trust is a legal entity that enables property to be passed from the grantor to their beneficiary. A trustee manages the trust and oversees the assets in the trust on the beneficiary’s behalf, in accordance with the grantor’s instructions.
Sound a little confusing? Here’s a simplistic way to go about it:
You have twenty bucks. You want to give those twenty bucks to your son, Jason, so that he can use it when he goes to the movies on Saturday. Nevertheless, you don’t want to give it to him just yet, since you know that he’ll spend it on something besides the movies if you give it to him prior to Saturday. You have a full schedule on Saturday and aren’t sure you’re going to be around to give her the twenty bucks. So, you decide to give the twenty bucks to your brother, James, and ask that he keeps it until Saturday, where upon he would give the money to Jason.
In this situation, you take the role of grantor, James the role of trustee and Jason takes the role beneficiary. If, instead of giving the money to James, you kept it to give to Jason on your own, you would take the role of being the grantor and the trustee.
If you were devising a real, legal trust, there would be more to the process, comprising of devising legal trust documentation and possibly recruiting the help of a lawyer.
Do I Need a Trust if I Have a Will?
When you currently have a will, do you also need to create a trust? It is subject to your requirements and the requirements of your family. Typically, a trust is a quicker, more effective method of getting your assets to your heirs, though it’s sometimes more costly to create a trust than to set up a will.
Carefully planned estates sometimes make use of both trusts and wills. You could opt to put just a couple of important assets, like your home, in a trust and leave the remainder to be determined by your will. This can help guarantee a swift transfer for your most vital assets whereas the rest of your estate goes through the typical probate process.
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Putting your House into a trust. Putting Your House Into A Trust | Rocket Mortgage. (n.d.). Retrieved October 27, 2021, from https://www.rocketmortgage.com/learn/putting-house-into-trust.
Arizona Family Law
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