If you want to create a trust, then you may already be familiar with a trust’s benefits. It protects your assets and also helps your beneficiaries avoid taxation. All kinds of assets can be in trusts.
If you’d like to pass property on to your children without having them go through probate, a trust can help with that. The trust can also minimize how much your children would pay in taxes. However, remember that there are some complicated tax implications if you want to use the home while it’s in the trust.
What should you do to pass your home to a child without a long probate period?
If you gift the home to your child during your lifetime, then the gift doesn’t necessarily have to be in a trust, but the trust does help protect it and provides guidelines if your child is not yet old enough to understand the value of the property. Placing the home in the trust also means it automatically passes to your child at the time of your death.
As soon as you place your property into the trust, it belongs to the trustees, not to you. You may be limited in how much you can place in the trust while still avoiding taxation, too. Usually, putting your home in a trust doesn’t offer any additional favorable tax treatments, but if the trust is designed well, you could save on estate taxes if they are owed by your beneficiaries when you pass away.
Is a trust a good option?
If for no other reason than it gives you more control over your assets, yes. A trust makes sure your beneficiaries receive what you want them to have without having to go through a long probate process. It’s relatively easy to set up with an attorneys help, and some trusts can be altered while you’re living.