For the last few weeks, I have been discussing the importance of having a Living Trust.
One of the major reasons people chose to establish a Living Trust is to avoid probate.
Probate can be a very time-consuming and costly experience for your beneficiaries.
What happens to someone’s home when he/she/they pass away all depends on how title is held.
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If you own title to your home and don’t have a will or a Living Trust, then your home will go through the probate process.
The court process, known as probate, will follow your state’s probate laws and distribute your real estate according to state law. Your state’s laws may or may not be in agreement with how you would like your real estate to be distributed.
Furthermore, while this process is occurring, attorneys and the court system, will be charging fees to your estate.
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If you own title to your home and have a will, then your home will still go through the probate process.
Keep in mind that having a will provides instructions for probate. So although your home/real estate will most likely go the people you want, the probate process will still occur.
Remember also, that while this process is occurring, attorneys and the court system will be charging fees from your estate.
Furthermore, since the probate process is part of public record, anyone can see what you owned and how you owned it.
Also, if someone believes they have a legal right to your property they can argue within the probate process. This could potentially delay anyone from receiving your real estate until probate decides who has the legal right to your real estate.
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One way people have tried to avoid probate with their home is to add their child(ren) to the title of their home.
The problem with this strategy however, is that adding your children on title as joint tenants also means that they are then co-owners of your property.
This means that you need their permission to sell or mortgage your property.
It also means that your property could be subject to the claims of their creditors.
You may create unneeded liability and tax consequences upon your children.
Finally, when you add your child on title as a joint tenant, you may be liable for gift tax, and if your child
dies before you, your family may have to prove that your house should not be probated in their estate settlement.
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Transferring your real estate into a Living Trust is one of the BEST ways to avoid probate.
In fact, if you have a Living Trust, most professionals would highly recommend that all your real estate be transferred into your Living Trust.
Otherwise, upon your death, depending on how you hold the title, there will be a death probate in every state in which you hold real property. When your real property is owned by your Living Trust, there is no probate anywhere.
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Obviously there is much more to know and learn about the benefits of a Living Trust!
Contact Me Today to learn more about establishing a Living Trust for you and your family!
*The articles on this blog are for education and entertainment purposes only and should not be taken as financial or legal advice. See legal disclaimer for further information. If you would like more information about how something listed in any of my posts specifically affects you, please feel free to comment below, email me, or call me anytime.