Asset Protection: Saving Your House with a Trust
For many seniors, your house is your largest asset, so you’re naturally looking to protect it in the event of a medical issue or death. And while you might have a will, it may not be enough to protect your assets. While both are legal documents laying out what you would like to have happen at your time of death, there are several key differences.
Wills
With a will, asset distribution is handled through probate. In other words, it’s handled through the court system, with probate being the name of the legal proceeding. The process can be lengthy, taking years to complete, as well as costly. In addition, family members will have to attend several court dates, which means paying both in time and money.
Trusts
However, probate can be avoided through a trust. Through a trust, asset distribution is done outside of the courtroom in as little as a few weeks. For instance, if your house is listed in a trust in order to pass it along to your son, that process will be much easier and cost less than simply a will and the probate process.
Another perk of the trust is that an estate planning attorney is paid while you’re alive. Instead of giving legal bills to your immediate family upon your death, it’s already paid for. Trusts are also kept private. With a will, everyone can see how much each person is getting. With a trust, that is all private information and locked away in the trust.
There is a time and place for a trust. For smaller assets, a will may suffice. For larger assets, like a home, a trust offers more options and peace of mind than a will. There are other reasons, as well. For one, your loved ones will be spared the probate process and the cost of the probate process. That can be a hefty fee, up to three percent of an asset’s value in some cases.
As mentioned above, working with an estate planning attorney at The Mattar Firm on estate planning and setting up a trust means that all of the work is done while you’re still with your family. When the time, hopefully very much in the future, comes of your passing, the assets will be distributed without the cost and time commitment of probate and in the way you intended. Your family won’t be spending time or money in court trying to claim what you’ve left them.
Revocable and Irrevocable Trusts
If you’re considering a trust for your home, there are two kinds to consider. The first is a revocable, or living, trust, and the second is an irrevocable trust. As the name implies, an irrevocable trust cannot be changed after it is set-up. You will be unable to add to it or dissolve it. This type of trust can save you money on taxes, however, as it won’t be included in your estate’s value at the time of your death. In terms of long-term money management, this can make sense.
A revocable trust, on the other hand, can be changed and managed. You can add and remove assets and have control of the trust up until your death. Should you be incapacitated before death, a designated and trusted co-trustee will operate the trust. There are downsides, however, despite the flexibility. In a living trust, your assets are taxable, and they can be seized by creditors. That might be something to consider when setting up a trust to protect your home.
It is important to consult with an experienced estate planning attorney, as they can guide you through the process of establishing a trust and making sure you’re going about it in the right way.
Contact The Mattar Firm
At The Mattar Firm, our experienced estate planning lawyers can guide you through the process of establishing a trust. Contact our estate planning lawyers now at 239-222-2222.