5 Reasons Your House Should be In a Trust

5 Reasons Your House Should be In a Trust

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Your Home Is Likely Your Most Valuable Asset

For most of us, our homes are the most valuable investment and asset. Our homes are the center of our lives and families. But most of us don’t do the right things to protect our homes. Perhaps we don’t understand the importance of it or the ways that

When people talk about protecting a home with a trust, they generally are referring to Revocable Trusts. A Revocable Trust is a flexible instrument that can be changed over time. This is important because our estates change through our lives. So do our families as marriages and divorces occur and new kids or grand kids are born.

Revocable trusts, or living trusts, have many benefits, which are outlined below. But at a high level, once the trust is formed your home and other assets are placed into the trust. It becomes the owner but you retain control. And you can make changes to the trust at any time.

What are the benefits of a Revocable Trust? Here are 5.

#5 – Avoid Probate

Trusts help you avoid probate. Probate is the legal process of resolving your estate through the courts after you pass away. During this process, your assets are frozen. By avoiding probate, you save your heirs from a burdensome and expensive process.

Trusts are Private. Probate is Not.

Probate is public. Your estate and filings are publicly available. This means that people can learn what you own, what you owe and where and to whom you left your estate to. This can be potentially embarrassing, can lead to family disputes and even challenges to the estate.

Trusts are confidential. The contents of your estate and the ways you left it to your heirs are all private. This is how it should be; your estate is not a public matter. With proper estate planning, it will remain private.

Probate is Expensive and Time Consuming

Probate comes with fees that diminish your estate. And during this process, which can take months or longer, your assets are frozen. This puts a huge burden on your family as they are grieving.

Probate fees include:

  • Executor Fees – for the executor assigned by the state.
  • Attorney Fees – this can be hourly or a percentage of the estate.
  • Appraisal and/or Valuation Fees – these establish the value of your property.
  • Realtor Fees – if your property needs to be sold as part of resolving the estate.
  • Other Fees – there may be a need for an accountant or to ship items. These are just a few examples.

This time and expense can generally be avoided with proper estate planning. Cunningham Law helps protect clients from these time consuming and expensive outcomes.

#4 – Trusts Have Tax Benefits

Revocable Trusts allow you to retain the benefits of home ownership on income taxes. And they allow you to avoid estate taxes. It is true that estate taxes currently only apply to a very small number of people. However, with a knowledgeable estate and tax attorney, taxes can be minimized.

Cunningham Law is expert at advising on both asset protection and tax reduction. This is a complex issue. To learn more, we recommend a consultation.

#3 – Asset Protection

A Revocable Trust, when coupled with a Declaration of Homestead, can protect your assets from creditors. The Nevada Homestead Law that allows you to protect up to $605K in home equity. With a proper Declaration of Homestead, this equity cannot be challenged.

Don’t put your hard earned equity at risk. Let Cunningham Law show you how to keep your assets safe.

#2 – Planning for Incapacity

We are far more likely to become incapacitated in our lives than to pass away early. Many people do not realize that estate planning is not just planning for your death. It also plans for your incapacity. In the event this happens to you, your successor trustee would be able to step in and manage your assets even though you are not able to do so.

Cunningham Law will help you specify who will manage your affairs in case of a medical emergency or sudden illness. This alone is worth creating a proper estate plan.

#1 – Transferring Assets to Heirs

The primary reason for estate planning is to specify how and when your assets are transferred to your beneficiaries. It allows you to set conditions on how and when heirs receive their inheritances. These are just a few examples.

Caring for Those Who Need Protection

Let’s say you have minor children. A trust can be created that helps protect them. A trustee is assigned to manage the assets and distribute them according to your wishes.

If you have a special needs child, they need to be protected when you are not there to do so. A Special Needs Trust allows you to set up your child’s care, expenses and to provide for them in the way you designate.

Setting Distribution Conditions and Schedules

A large inheritance can be a dangerous gift. In the wrong or in unprepared hands, it can be lost through carelessness. Setting conditions on distributions can help protect your heirs. It can also inspire them to meet those conditions, which could be education or sobriety conditions. And you can make sure that there is oversight to keep the estate from being squandered.

Blended Families

It seems that blended families are the norm today. You may want to limit who receives an inheritance from your estate. This is an extremely complex topic but the important thing to know is that you need a plan to set out who will receive specific assets.

Every situation is unique. The common thread is that you need a plan and that a consultation with Cunningham Law will help you understand the process and your options.

Contact Us for a Free Consultation

We covered a lot of ground in this article and video. There is much more to know and consider when making an estate plan. The most important thing to know is that you need a qualified attorney to guide you through this process. Cunningham Law has over 20 years of experience helping people plan the future for themselves and their families. Contact us for a free consultation today.