There are many benefits in putting your real property into a trust. A few of the top ones include avoiding probate, controlling property distribution, and asset protection.
Avoiding Probate
One of the primary reasons people choose to put their real property into a trust is avoiding probate.
The probate process can be extremely costly, time consuming, and stressful. Furthermore, typically creditors file claims against the estate to recover funds owed to them. When real property is transferred to a trust, it does not pass through probate as it usually is required to.
Controlling Property Distribution
Many people put real property into a trust for the purpose of controlling property distribution.
When property is transferred into a trust, the trustor that creates the trust can detail the exact terms of how the property is to be held, used, or distributed to beneficiaries. This allows for creation of life estate where a beneficiary can use the property during their lifetime and then the remainder to another beneficiary, the property can be kept and held in trust and used for a specific purpose, or it can be distributed to beneficiaries or sold. When a property is in trust, the trustor is able to control these terms and what happens to it after they are deceased.
Asset Protection
Many people utilize trusts for asset protection.
When property is transferred to an irrevocable living trust, upon the death of the trustor and the trust becoming irrevocable, the trust holds the property which provides protection against creditors.
In addition, there are tax benefits in putting property in an irrevocable living trust. Generally the property receives a set up basis, which can reduce capital gains tax for beneficiaries if they sell it right away.
Contact us today to find out more about putting your real property in trust and how it can benefit your specific situation.
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