They will create a property trust and transfer the property into the trust. Speak with an estate planning attorney if you want to consider placing your home in a property trust. If you have a vacation home in Arizona but live in Michigan, your executor will have to navigate probate in both states. When family dynamics are complicated, this can create long-lasting family battles.Ī property trust is also far simpler for your executor, especially if the home is in another state. If it goes through probate, the transfer of property becomes part of the court record, and anyone will be able to see who inherited the home. If the house is sitting empty, it can become a target for thieves and property scammers.Īnother benefit of a property trust is to keep the transfer of the home private. Probate also takes time and while probate is in process, homes need maintenance, taxes need to be paid and costs add up. Probate costs are borne by the estate and thus the beneficiaries. The cost and time of probate is another reason why people put their homes in trusts. Having a will, even if you don’t put your property into a trust, is a better alternative. If no living relative can be found, the state inherits the property.Ĭhances are you don’t want the state getting your family home.
If there is no spouse and no offspring, the property will go to the next closest living relative, such as a parent, sibling, niece, or nephew. If the home is not in a trust and not mentioned in a will, the property will usually go to a spouse or child, although there’s no guarantee this will happen. If there is no will giving direction to how the property should be distributed, then it is distributed according to the state’s laws. When the owner dies, their estate goes through this court process and any debts or taxes owed on the property are paid. People who put their homes in a property trust often do so to avoid having their home going through the probate process. Generally speaking, people have three basic reasons to place their homes into property trusts-to avoid probate, to keep their transaction private and to keep the transfer simple.Īvoiding probate. If the main reason you’ve put the house into a trust is to protect it from creditors, a court could reclaim the asset if it were determined the sole reason for the transfer into the trust was to elude creditors. However, because you maintain control of the asset in a revocable trust, it’s not protected from creditors. If it’s a revocable trust, you can change the terms of the trust up until your death. Which one you use depends on your unique circumstances. The property trust can be a revocable or irrevocable trust. A property trust makes it far more likely your home will go to its intended beneficiary. Consider placing your home in a property trust. Property trusts allow you to place your personal residence or any property you own into a trust to be given to a beneficiary, explains a recent article, “When Should I Put My Home in a Trust,” from yahoo!.
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