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Putting your house into a trust can be beneficial in many ways. It can protect your assets if you have financial problems. It can make it easier to leave an inheritance to your family and it can even help you take advantage of tax benefits like the home mortgage interest deduction, which wouldn’t be available otherwise. Read on to find out more about some of the most notable benefits of putting your house into a trust. What Is A Trust? A trust is an estate planning tool that allows someone to pass money or property to beneficiaries without having to go through the probate process. The person creating the trust (known as the grantor) transfers ownership of assets into a trustee's hands, who then distributes them according to the terms set forth by the grantor in the document known as the trust agreement. There are many benefits that come from putting your house into a trust. How Does A Trust Work? A trust is an arrangement where the person who creates the trust, known as the settlor, gives assets to another person or entity (known as the trustee) to manage. The beneficiary is someone who will ultimately receive the assets held in trust when they come due according to the terms set by the settlor and detailed in the legal documents that establish and govern the trust. For example, if I create a trust for my daughter and leave all my property to her when she turns 18 years old, then she is the beneficiary. The trustee can also be a person other than myself; in this case, I would be called the trustor rather than the settlor. When you put your house into a trust you are essentially assigning ownership of your property to someone else until you die or otherwise decide it should revert back to you. What Are The Benefits Of Putting Your House Into A Trust? You can only live in the house for a certain amount of time. If you want to sell your house, you must first offer it to the trust. If you want to leave the country, your funds will be limited. You are not allowed to make any significant changes to the property without permission from the trustee. The trustee is responsible for maintaining and repairing the property on behalf of all beneficiaries. In addition, the trustee provides annual reports to the beneficiaries. A trust prevents disputes over assets. It puts an end to arguments about who owns what or who gets what when somebody dies. Reduces tax burden by spreading out payments. Keeps other family members out of legal battles. Gives you more control over your finances, as well as peace of mind knowing that everything is being taken care of. How Do You Set Up A Trust? Setting up trust can be confusing, but there are many benefits. There are two types of trusts: revocable and irrevocable. A revocable trust can be modified or dissolved by the grantor at any time, while an irrevocable trust is final and cannot be changed. Most people create an irrevocable trust to avoid the possibility that they may want to change their will in the future. Who Should You Name As The Trustee Of Your Trust? A trust should have a trustee. This is the person who will manage the property on behalf of the beneficiaries. The trustee can be either an individual or a company and can be named in your will or appointed during your lifetime. If you are married, it is important to name both spouses as co-trustees for several reasons. About The Author Jim Turner is a USA-based author of Legal issues related to estate planning, will & trust, business law, and elder law. Jim Turner does his best writing on these topics last will and testament Michigan which helps users to find the best solutions to their FAQ on estate planning, putting a house in trust, living trust, and more about legal family issues. The author can be reached through rochesterlawcenter.com
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