by Brandy Abalos
living trust is a legal arrangement used to manage assets after the death of an individual. The trust is set up during a person’s lifetime and distributed after their death. There are many pros and cons of using a living trust. Some of those include the following.
Pros of Putting Your House in a Living Trust
There are certainly some benefits to putting your house in a living trust, including the following.
- You May Avoid Probate
- The legal procedure for allocating a deceased person’s property is called probate. It can be time-consuming and expensive. A living trust can avoid probate by transferring ownership of your house to the trust while you are still alive.
- Protect Your Assets from Creditors
- If you are sued or become insolvent, your house may be at risk of being seized by creditors. However, if your house is in a trust, it may be protected from creditors.
- Maintain Control Over Your Assets
- Choosing to be your own living trust’s trustee will allow you to maintain control over your home and any other assets contained in the trust. You can also give your spouse or another trusted person the power to manage the trust on your behalf if you become incapacitated.
- Provide for Your Minor Children
- If you have minor children, you can use a living trust to specify how you want your house and other assets to be distributed to them when you die. You can also name a guardian for your children in the trust.
- Maintain Your Privacy
- Because probate is a public process, anyone can see the specifics of your estate. A living trust is a private document, so your financial information will not be made public.
Cons of Putting Your House in a Living Trust
While there are several benefits, there are some drawbacks to putting your house in a living trust, including the following.
- Setting up a living trust can be costly, especially if you have a complex estate. The best course of action is to hire an experienced estate planning attorney. Your legal fees may be more than you expect in some situations. However, working with an attorney will guarantee that you get the outcome you desire.
- Complexity of the Documents
- Living trusts can be complex documents. It is different from a will, which many people can write on their own. An estate planning lawyer should handle a living trust.
- Loss of Control of the House
- Once you transfer ownership of your house to a living trust, you will no longer have complete control over it. The trustee will manage and make decisions about the house. This problem can be combated by naming yourself as the trustee. It’s best to talk to your estate planning lawyer about your options.
- Other Assets May Still Be Subject to Probate
- If you have other assets, such as bank and investment accounts, that are not in your living trust, they will still be subject to probate. You can address this with an estate planning lawyer who can help you avoid probate with some or all of the rest of your assets.
Using a Living Trust for Your Home Can Be Helpful
Putting your house in a living trust can provide for your loved ones posthumously, avoid probate and protect assets. However, it is important to weigh the pros and cons. If you are considering putting your house in a living trust, it is crucial to speak with an experienced estate planning attorney.
If you are trying to decide whether putting your house in a trust is right for you, it is always best to speak with an experienced estate planning attorney.