Most consumers assume that the only way to protect their family real estate is by placing it into a trust. While you can avoid probate court and protect your real estate from creditors, there are some disadvantages too. It is important to understand the advantages and disadvantages of using trusts to protect your real estate before doing it.
A Living Trust – Protecting Assets While You are Alive
A living trust is created while you are still alive. It permits your beneficiaries to change the terms of the trust and stay in control. The title of your home is transferred from your ownership into the trust and overseen by the trustee. Once you pass away, the terms of the trust can no longer be changed and it moves from being a “living” trust to an “irrevocable” trust.
Pros of Putting Real Estate into a Trust
There are a few advantages to putting your real estate into a trust (including family vacation homes and investment properties). Some pros to doing so include:
1. Avoiding Probate – By putting real estate into a trust, you can avoid probate and the associated costs of going to probate court. Even a streamlined probate costs time and money, and most beneficiaries would rather settle the estate than wait for a court to decide. Through a trust, you can transfer ownership of your property quickly and without going through probate. If you have vacation homes in another state, you may be able to avoid probate in those states by simply transferring the real estate into the trust.
2. Incapacity Protection – If you were to become too ill or incapacitated to manage your estate, a trust can protect your home. The trustee will be able to manage the property and other assets while you are unable to do so.
3. Tax Protection – A properly drafted estate plan can help protect you from unwanted estate taxes. It requires a skilled estate attorney to create a trust that protects you from taxes – revocable trusts may not protect you.
Cons of Adding Real Estate to Your Trust
The disadvantages are much less than the advantages. In fact, the only disadvantage is the upfront hassle. It will take a little time and require you to hire an attorney to put your real estate into your trust. But, despite the cost and time, you would spend much more money and time in probate court if your real estate were not put into the trust.
Hire a Skilled Estate Planning Attorney Today
The art of drafting trusts is not easy. You need a skilled attorney that knows how to add real estate to a trust, protect you from estate tax, etc. The trust and estate planning attorneys at the Campbell Law Group can help. We understand trusts and can protect your real estate and investment properties. Contact us today for a consultation by calling 305-328-9506 now.