Why Put Your Home into a Trust?
As a homeowner, your house is likely one of your most valuable assets. But have you thought about how to protect that asset and ensure it gets passed on to your loved ones according to your wishes?
Putting your home into a trust is a smart strategy that can avoid probate hassles, minimize taxes, help safeguard your property from long-term care and nursing home costs, and give you greater control.
Here are some key reasons to consider a trust for your home:
1 - Avoid Probate
When you pass away, any assets held in your name alone have to go through probate - the lengthy court process of validating your will and distributing your estate. Probate can be expensive, time-consuming, and public - something most people prefer to avoid.
By transferring your home's ownership to a trust, you ensure that the property bypasses probate entirely. This allows for a much smoother and quicker transition of the home to your designated beneficiaries without court involvement.
2 - Asset Protection
Certain types of trusts, such as Medicaid Asset Protection Trusts, can protect your home and other assets you place in it from long-term care and nursing home costs. If you would like to learn more, you can click here to download my guide, “Save Our Home, How to Protect Your Home and Life Savings from Long Term Care and Nursing Home Costs”
3 - Tax Benefits
Depending on the type of trust used and your state's laws, putting your home in a trust can also provide significant tax advantages. You may be able to minimize or completely avoid estate taxes on the value of your home when it passes to your beneficiaries.
Certain trusts, like a Qualified Personal Residence Trust or QPRT, can also help reduce or eliminate gift taxes and capital gains taxes related to your home - allowing more of your wealth to stay in your family.
Types of Trusts for Homes:
When it comes to trusts for your home, there are a few main options to consider:
A revocable living trust allows you to maintain control over the property during your lifetime, but ensures its distribution avoids probate when you pass away.
An irrevocable trust, like a MAPT or QPRT, transfers complete ownership to the trust which provides greater asset protection and tax benefits, but you relinquish some control.
We can help guide you on the best type of trust based on your specific situation and goals.
Here are the key steps to put your home into a trust:
1) Work with our team to create the appropriate trust documents.
2) Legally transfer ownership by recording a real estate deed from you to the trustee of the trust - which depending on the type of trust, may be you, one or more of your kids, or a third party - with the county real estate office. We will prepare the appropriate deed(s) as part of your plan.
3) Update insurance, taxes, and other documentation for the ownership change.
4) Properly maintain and manage the trust according to its terms.
By taking this proactive step to put your home into a trust, you'll gain invaluable peace of mind. Your home and your wishes will be protected, allowing for an efficient transfer to your beneficiaries while potentially minimizing taxes and protecting your home and other assets.
It's a smart, powerful way to secure your legacy. If you're a homeowner looking to protect one of your biggest assets, you may want to consider using a trust.
If you would like to discuss setting up a trust, call us today at either (941) 909-4644 for our Florida office or at (763) 420-5087 for our Minnetonka, Minnesota office, or you can fill out the contact form on this page and a member of our team will reach out to you to schedule your consultation.
Or, if you are not yet ready to schedule a consultation and would like to learn more, I am hosting an online masterclass where I reveal strategies for your will, trust, financial powers of attorney and health care documents as well as strategies for minimizing or even avoiding estate taxes and how to protect the money you leave for your kids in the event they get divorced, get sued, have poor money management skills or something unforeseen happens in their lives. The class is free and you can register by clicking here.
