Transferring real estate in your trust

On Behalf of | Jan 21, 2020 | Estate Planning, Real Estate

Real estate plays an outsize role in estate planning. Aside from savings and investments, your home is likely your largest asset. And if you own other properties, they may form the bulk of the assets you pass on.

But transferring property involves more than deeds and titles. Creating an estate plan can help direct your holdings to the people you want to receive them. If you suspect that your relatives will fight over your real estate assets, setting up a trust can help reduce these squabbles.

Even then, you must consider what type of trust is right for your estate.

Passing property along now

One way of passing your property along is by doing so while you’re alive. You can accomplish this through a Qualified Personal Residence Trust, which is a particularly good option if your holdings have a high value. The trust puts your home’s ownership into the trust’s name, while allowing you to retaining partial interest in it. You can live there for as long as the terms state. If you outlive these terms, your trust also receives a tax break, since your home is taxed at the value it entered the trust at.

Passing property along later

Yet you may want to remain in your home until you pass. Your beneficiaries won’t receive a tax break in this instance. But the trust still ensures quick and easy disbursement of your property. Unlike a will, trusts do not require recipients to go through probate hearings. These lengthy and expensive deplete anywhere from 3 to 7% of the estate’s total value. The trust process happens out of court, so the fees required for setting it up may represent significant savings for all involved.

Putting your trust in a trust is a sensible option. It can help you pass along your home or property portfolio without hassle. Working with an estate lawyer can help you determine if a trust aligns with your unique real estate situation.