Many of us make plans thinking that things will always be the same: We will always have relatively good health, our memory and full mobility. But this is, sadly, not always the reality as we age. One question that comes up a lot is whether it is wise to put a house into a trust. While every situation is different, there are some things to consider.
Three reasons to put your home into a trust
There are three solid reasons why a trust might be a good option for the family home:
- Your home can avoid the probate process
- Your home will have protections from certain legal disputes
- Your trustee or trustees can act to sell your home if the need arises
Putting the family home into a trust can work to avoid having it go through the California probate process. This process can take months and cost thousands. Putting your home into a trust can also let your loved ones know who you want to have control over the maintenance or sale of the property should you become incapacitated. A trust is also a good way to protect a home from certain family disputes or even some creditors.
What happens when dementia takes over?
When people decide to put their wishes down in a last will and testament various assets can be assigned. This means an IRA or 401(k) can have a designated beneficiary or beneficiaries. That valuable painting can go to the child who has always adored it. Cars, collections and other assets can have designated recipients.
The family home however may, in some cases, be best put into a trust if the sole owner is vulnerable to memory loss issues or other serious health concerns. If, for example, there are two trustees named–the home’s owner and a trusted friend or family member–then in the unfortunate instance where the home’s owner suffers from dementia or a stroke or is otherwise mentally incapacitated, that second trustee can act. In some cases, it may become necessary to sell the home because it is no longer being lived in and is costing money. In other situations, the influx of cash from the home’s sale can be used to pay for care for the home’s owner who may be living in a care facility or to pay off accrued medical expenses.
The best way to determine whether you should put the family home into a trust is to talk to an established California estate planning attorney.