As you age, you'll begin working on your estate plan and deciding on what to do with your assets. One of the major purchases you made, your home, will also be a part of this plan.
As one of your primary assets, you want to do all you can to protect it. There are a few things you can do to make sure it's transferred to your beneficiaries and heirs instead of selling it. One of those things is to place it in a trust.
Why would you want to place your home in a trust?
There are a few reasons to place your home in a trust. The first is because it protects it against most creditors and helps you save on estate taxes. Why does a trust do this?
It's simple. When you place something into a trust, particularly an irrevocable trust, it's no longer in your name. If you don't own it, you won't be taxed on it or have it used as a portion of your estate's value.
Another major benefit is that you can help your loved ones avoid probate. Living trusts are designed in a way that helps you avoid probate upon death. If you don't have your home shielded from probate, it can be a long, tedious process to get it distributed to your heirs. That's time they'll have to spend in court and working with an attorney. To avoid this, set up the trust ahead of time.
You can also add your spouse as a co-trustee on your trust, which is beneficial for a few reasons. The first is that the home is shielded. The second is that your spouse takes over control of the trust in the case that you are incapacitated in some way.
What kind of trust is best for protecting a home?
Shielding your property may be done best with a few kinds of trusts depending on the circumstances. Some people may see the most benefit from revocable trusts. Others might prefer irrevocable. It's important to talk to your attorney about your situation to determine which trust is best for shielding your home from taxes or probate. Once you have a better idea of the value of your estate and how your home's value plays a role in the potential for being taxed, you'll be able to make a good decision on the kind of trust that could work for you.