Buying a Home in Trust

Estate planning is mainly concerned with putting documents in place that will allow you to achieve the following three objectives:

1. Specify how you want your money and assets distributed to your loved ones when you die;
2. Pass on your money and assets to your loved ones as efficiently as possible e.g. by avoiding probate; and
3. Plan for the management of your assets during times of incapacity.

The two most frequently used estate planning documents are:

1. A Last Will and Testament; and
2. A Living Trust

Each of these documents allow you to indicate which of your loved ones should inherit your money and assets when you die. However, with a Will, your estate must go through a probate court before your loved ones can inherit any of your assets, which can take months or potentially years and be very costly.

On the other hand, a Trust allows you to avoid probate. This means your loved ones can inherit your money and assets in days or weeks after you die, rather than months or possibly years.

Why Buy a Home in Trust?

Buying a home in trust offers three main advantages:

1. Probate Avoidance – After you die, your loved ones can inherit the home without needing to go through the time, expense, and stress of a long, drawn-out probate process. Instead, your loved ones can take ownership of the home shortly after your death.

2. Incapacity Protection – Many people mistakenly believe that estate planning is only involved with planning for what should happen after you pass away. A comprehensive estate plan involves planning for periods of incapacity during your lifetime as well.

When you set up a Living Trust to buy a home, you designate a Successor Trustee, who will be responsible for managing the trust and transferring the home to the Trust Beneficiaries after your death.

The Successor Trustee will also be responsible for managing the trust and taking care of the home if you become incapacitated due to injury or illness and can no longer do so yourself.

By buying a house in Trust you can ensure that your most important asset will be managed and taken care of by someone you trust should you become incapacitated.

This feature of a Trust can also protect your family from undergoing a conservatorship if you become incapacitated during your lifetime. A conservatorship is when a court-appointed guardian is given the authority to manage an incapacitated person’s assets for them.

Buying a home in Trust can save your family the time, money, and stress of having to go to court and ask for a conservatorship in order to manage your home and finances. The Successor Trustee can simply step in as the active Trustee until you are no longer incapacitated.

3. Privacy – Probate is a public process, so your family will have no privacy. Anyone will be able to see what’s in your estate, who you owe money to, who will inherit your assets, and when those assets will be inherited.

This lack of privacy also invites disgruntled heirs to contest your Will, and can expose your estate to predatory creditors and frivolous lawsuits.

Buying a home in Trust can keep your financial matters private. Since there is no probate process when transferring a home through a Living Trust, there is no need to disclose details about the finances involved.

On the other hand, if your house transfers through a Will, the financial details involved will be exposed to the public when the Will is entered into probate.

But when the home transfers through a Trust, essentially the only ones who will be privy to the details of that transfer are the Successor Trustee and the Trust Beneficiaries.

If I Buy a Home In Trust, Do I Lose Control?

No. If you buy a home with a Revocable Living Trust (as opposed to an Irrevocable Living Trust) you will retain full access and control over the home. In other words, as the Trustee, you will be able to do anything with the home that you could do otherwise, including purchasing or selling the home, or even giving it away. You even file the same tax return. What’s more, you can even change or cancel the Revocable Trust at your discretion at any time.

Contact an Experienced Virginia Estate Planning Attorney

Buying a home in Trust is actually quite simple, but there is still a lot that can go wrong. Therefore, you should always enlist the assistance of an experienced estate planning attorney.

If you need help setting up a Trust to buy a home in Virginia, our law firm can help. Call us today at (703) 553-2577 or use the contact form on our website to arrange a consultation with an experienced Virginia estate planning attorney.

The information on this site is for general informational purposes only. The information presented in this site is not legal advice or a legal opinion. You should seek the advice of legal counsel of your choice before acting upon any of the information in this site.