It is not always necessary to use a will to pass your home to a family member upon your death. Other estate planning options may answer some concerns you have that a will is not capable of addressing. For instance, you might consider putting your house into a trust.
This option is not for all homeowners, but it can potentially benefit you and your intended beneficiary in specific situations.
Avoid probate
Putting your home in a trust allows your property to avoid the probate process. Probate is a court procedure that determines the validity of your will and facilitates the distribution of your assets. This process can be lengthy and expensive, and possibly even subject to challenges in court. Circumventing probate allows for a smoother and more private transfer of ownership to your beneficiaries.
Maintain privacy
Unlike wills, which become public records during probate, trusts remain private. This confidentiality may prevent family disputes or challenges to your wishes, keeping your affairs out of the public eye. Maintaining privacy is especially beneficial for those who value discretion regarding their assets and beneficiaries.
Guard assets against creditors
Creating an irrevocable trust can potentially shield your assets, including your home, from creditors. This type of trust transfers ownership of your assets to the trust, making them less accessible to creditors or nursing homes seeking reimbursement for long-term care costs. An irrevocable trust can provide asset protection during your lifetime.
Plan for Medicaid
Placing your home in an irrevocable trust also may help you qualify for Medicaid benefits by reducing your taxable estate. Medicaid has strict income and asset limits. Transferring your home to an irrevocable trust can decrease your countable assets, potentially making you eligible for Medicaid coverage for long-term care expenses.
Trusts offer flexibility and control over the distribution of your assets, including your home. Still, placing your home in a trust should align with your specific goals and circumstances.
