Should you put your house in a trust? The answer is probably yes, and in certain situations, the answer is a resounding yes.
Revocable Living Trust
One of the wonderful things about revocable living trusts is there are very few downsides.
If you are not familiar with a revocable living trust, think of a trust as a bucket. The bucket can hold your assets and contain a set of rules and instructions for what happens with the assets upon your passing.
In that respect, the trust can function like a will in that it passes your assets to your beneficiaries. However, a revocable living trust has many benefits over a will, which may make placing your house in a trust a wise decision.
For example, to administer a will, it is necessary to initiate a court procedure known as probate. Probate can be a cumbersome and time-consuming process. However, a properly designed revocable living trust has the luxury of being administered in the privacy of your own home or your attorney's office, rather than in the courtroom. This process is private, quicker, and oftentimes significantly less expensive compared to probate. A revocable living trust can avoid the probate process, saving time and money.
If you own property in multiple states, such as Minnesota and California, a revocable living trust becomes even more valuable. With a revocable living trust, you will not have to open multiple probates across the different states.
Moving your house to a revocable living trust is beneficial in most circumstances. In fact, I struggle to come up with scenarios where families do not come out ahead by pre-planning and using trusts.
This often raises the question, will a transfer of my home to a trust protect my home?
With a revocable living trust, the answer is no. However, an irrevocable trust may be able to provide you with protection for your home.
Moving the house to an irrevocable trust has the result of removing it from your estate. This means it is no longer your asset from a legal standpoint. The house is owned by the irrevocable trust itself, similar to how a corporation can own an asset.
Since you no longer own or have control of the asset, the home may be able to be protected from creditors or if you want to apply for Medicaid.
Contact one of our attorneys at our Wisconsin (414-253-8500), Minnesota (612-204-2300), or California (310-438-4020) locations to make sure your assets are properly protected or for more information on a Trust, Will, Life Estate, Medicaid Planning, or Estate Planning.