Does it Make Sense to Put a House into a Revocable Living Trust?
A revocable living trust is a flexible estate planning tool that can be used to avoid probate. It is regulated by the New Jersey Uniform Trust Code (NJUTC). You may be wondering whether or not it makes sense to put a house in a revocable trust. The answer always depends on your specific situation. Here, our Monmouth County revocable trust attorney provides an overview of the advantages and disadvantages of putting a house in a revocable trust in New Jersey.
What is a Revocable Trust?
Simply explained, a revocable living trust is an estate planning instrument through which a person (the grantor) transfers ownership of assets to a trust while retaining the right to modify or revoke the trust during their lifetime. In most cases, the grantor also serves as the initial trustee and primary beneficiary. Though, there are some exceptions. It is a type of trust set up that allows the grantor to maintain full control over the property placed into the trust while alive.
Why Putting a House is a Revocable Trust Might Make Sense
Placing residential real estate into a revocable living trust can provide several estate administration advantages. Here are some of the most notable potential benefits:
- You Can Use a Revocable Trust to Keep the Home Out of Probate: If a home is titled in the name of a revocable trust, the property generally does not pass through the New Jersey probate process.
- You Can Use a Revocable Trust to Property Management: A successor trustee can step in immediately if the grantor becomes incapacitated or dies.
- You Can Use a Revocable Trust for More Privacy: Probate proceedings are part of the public record. A revocable trust operates privately. The trust can be kept private.
- You Can Use a Revocable Trust to Coordinate With a Broader Estate Plan: For people with considerable assets, placing the home in a trust can help ensure that property transfers occur in accordance with a plan.
Why Putting a House is a Revocable Trust Might Not Be the Best Option
Although revocable trusts can be valuable tools, transferring a home into a trust is not always necessary or advantageous in every situation. Here are some of the potential downsides:
- A Revocable Living Trust Does Not Offer Real Asset Protection: Because the trust remains revocable, the grantor retains control of the property. The trust does not provide asset protection.
- A Revocable Living Trust Requires Additional Administrative Steps: Creating the trust document alone is not sufficient. The homeowner must execute and record a new deed transferring the property into the trust.
- A Revocable Living Trust Offers Only Limited Benefits for Some Estates: In New Jersey, probate is relatively straightforward for many estates. It may not be worth the effort to set up a trust for a home.
- A Revocable Living Trust Comes With Upfront Costs: Establishing a revocable trust typically requires legal drafting, property retitling, and coordinated estate planning.
Speak to Our Monmouth County Revocable Trust Lawyer Today
At Poulos LoPiccolo PC, our New Jersey trust planning lawyer is committed to helping people and families find the best solution for their situation. If you have any questions about revocable trusts, please do not hesitate to contact us today for a completely confidential initial appointment. We handle estate planning in Monmouth County and Statewide in New Jersey.
Source:
pub.njleg.gov/bills/2014/AL15/276_.PDF
