A trust is an estate planning tool that can be used to protect your property from creditors, taxes, and lawsuits.
It’s important to note that a trust does not give you any control over the property it holds; trustees are in charge of the assets.
That means if you want to make changes or withdraw money from an account, you’ll have to get permission from the trustees first. A trust also helps avoid probate fees when someone passes away. However, there are some downsides as well: trusts may need more stringent accounting practices for tax purposes and they’re expensive given their complexity. But overall, this article will explore why a house should be put into a trust.
To Avoid Lengthy and Probate Processes
One of the reasons why you should put your house in a trust is because it will significantly reduce the amount of time required to get through probate processes. Probate is defined as the process by which the court manages and distributes an individual’s property after his or her death according to his or her last will and testament. If you don’t have a will and die without a trust, your heirs and creditors may be stuck in limbo while they wait for the probate court to work through your estate.
However, if you put your house into a trust then it can become what is known as “probate-avoiding property,” which reduces the time required to get through probate processes. This happens because trusts are often set up so that the surviving trustee(s) controls the property until beneficiaries come of age or other conditions are met.
That Means You Can Avoid Liens and Foreclosures
When certain debts aren’t paid off after someone dies, liens and foreclosed properties can happen. For example, when you fail to pay off your mortgage after passing away, your home can become collateral for the bank until someone pays back the remaining balance on your account. That means that if you have a trust set up to hold onto your house, then it will be paid off before anything else.
You Get More Control Over Your Assets
If you need money during an emergency or otherwise decide that you want to sell your home quickly without waiting for probate court processes to move through, having this power allows you to do so. Another reason why putting your house in a trust is good is that you get more control over what happens to it. When there are no trustees named in the trust document who have control over the property, then no one can sell it without going through the proper legal processes that are generally associated with selling a home.
That Means It’s Easier to Avoid Temptation
If you put your house in a trust, you will have less temptation to take care of yourself or your family by spending money from your account on other things. By putting your house into a trust, someone else is controlling what happens with it so there is no chance of mistakes being made if you decide not to use common sense when it comes to spending the money.
Divvying Up Your Assets Would Be Easy
Another reason why you should put your house in a trust is for when it’s time to divide up assets among yourself and your heirs. If you don’t have a will, divvying up assets can be very difficult because everything is considered part of the estate—which means that there are no rules about how big or small each portion of the estate is—and probate court processes require that everyone involved agree on what’s happening.
But if you’ve put all of your assets into one trust before passing away, then all beneficiaries need to do is deal with the person who serves as trustee (likely whoever set up the trust) in order to get their sharings.
No Worries About Your Inheritance Being Squandered
One final reason why you should put your house in a trust is that it ensures that your family won’t end up squandering your inheritance if something happens to them. When beneficiaries don’t have complete control over what happens with the home and property, then there is less of a chance for this type of wasteful spending (if anyone can even access and use the funds).
If someone sets up a trust document to avoid probate processes, liens, foreclosures, temptation, difficult divvying up of assets, squandered inheritances, and more, then putting their house into the trust becomes an easy decision.
There are many reasons why one might want or need to set up a trust. There are also some exceptions that would allow one not to set up a trust, but they are very rarely applicable. One of the most often used exceptions is if you do not have more than $40,000 worth of property that you wish to pass on. However, even if this applies to you, do not think that it means you should not set up a trust. It is best to seek legal advice in order to determine what will work best for your individual situation and concerns.
Comments are closed.