Estate Planning

When Should I Put My House in a Trust?

Putting a house in a trust is an option that can help protect your assets and reduce the tax burden on your loved ones. But after being put in a trust, homes may become inaccessible to their owners. It’s important to research all the options, and if you go with a trust, to choose the right one for you. Here’s what you need to know about putting property in a trust.

Stephanie Faris

Stephanie Faris

Published March 16th, 2022

Table of Contents

Key Takeaways

Putting real estate in a trust is a move designed to ensure your home passes safely to beneficiaries.

An irrevocable trust makes it tough to sell or refinance your home in the years before it transfers to your heirs.

A revocable trust can protect your home from probate, but it doesn’t offer the protections you get with one that’s irrevocable.

As you start the estate-planning process, there are some important decisions to make. One of those is what will happen to your home when you die. Putting a house in a trust is an option that can help protect your assets and reduce the tax burden on your loved ones.

But after being put in a trust, homes may become inaccessible to their owners. It’s important to research all the options, and if you go with a trust, to choose the right one for you. Here’s what you need to know about putting property in a trust.

Reasons To Put Your House In A Trust

Often trusts are associated with death, but they can actually be useful while you’re alive. When you look into what is a real estate trust, you’ll find that it actually can protect assets throughout your lifetime. If you choose a trust that’s irrevocable, putting a home in a trust could shield it from creditors or legal action. Most importantly, though, that type of trust will help you qualify for programs like SSI and Medicaid, as well as helping you get into certain nursing homes that have income restrictions.

But it’s also important to know how to put a house in a trust so that it maximizes benefits after death. The biggest benefit of any type of living trust is that it keeps your assets from going into probate. If you don’t put your house in a trust, you could find your estate faces higher taxes than if separated into a trust, which can throw those assets into a lower tax bracket.

Reasons Not To Put Your House In A Trust

Before asking should I put my house in a trust, it’s important to have a thorough look through your assets. There are some good reasons to keep your house out of a trust. Many of the benefits you see under “why put a house in a trust” relate specifically to irrevocable trusts, which are trusts that can’t be changed. Once you put your home in that trust, you won’t be able to sell it or refinance it without the written permission of all the beneficiaries.

But putting your house in a trust has reasons beyond lack of access. As you look into how to put property in a trust, you’ll learn that many experts advise working with an attorney. You can do the legwork yourself and sign it with a notary, but you’ll also have to complete the paperwork specific to moving the house into the trust. Lastly, there’s the step of appointing a trustee. You might find these extra steps all go in the “con” column as you’re considering whether to set up a trust.

Do I Need a Trust If I Have a Will?

As you’re learning how to put your house in a trust, you might think that having a will is enough. In some cases, that’s true. But if you’re considering why to put your house in a trust, you might have reasons that aren’t covered by a will.

If you choose to put a house in a trust with a mortgage, you’re also afforded a little extra privacy. While wills are a matter of public record, trusts are private. This means your trust house that passes from you to someone else when you die can pass in secret, although it’s important to note that once the house transfers, the heir will no longer be able to hide it.

Revocable Trust vs Irrevocable Trust: Where Should It Go?

Why put your house in an irrevocable trust? You can’t sell it once it’s in the trust, after all, and you’re still paying the mortgage and property taxes on it. But an irrevocable trust isn’t the only option. If you look at why would someone use a trust, a revocable trust can give you access to your home while also bypassing probate when you die.

If avoiding probate is your goal, you should consider a revocable trust. Some even find that buying a house in a trust lets you set that house aside from the start. The problem with a revocable trust, though, is that assets in them aren’t protected from creditors, so you lose the protective benefits. But there’s another option. Look into should I put my house in a trust or LLC and see if an LLC gives you those protective benefits without the hassle.

Final Thoughts

Putting your home in a trust can be a great option if you have concerns about your assets being safely passed to your loved ones. But it comes with some downsides, as well. We recommend working with a certified financial planner to determine the best way to keep your assets safe while still keeping you in control.


Share this advice


Stephanie Faris

Stephanie Faris

Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.

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Intro to Estate Planning


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Trusts


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Estate Settlement

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Estate Planning

When Should I Put My House in a Trust?

Putting a house in a trust is an option that can help protect your assets and reduce the tax burden on your loved ones. But after being put in a trust, homes may become inaccessible to their owners. It’s important to research all the options, and if you go with a trust, to choose the right one for you. Here’s what you need to know about putting property in a trust.

Stephanie Faris

Stephanie Faris

Published March 16th, 2022

Table of Contents

Key Takeaways

Putting real estate in a trust is a move designed to ensure your home passes safely to beneficiaries.

An irrevocable trust makes it tough to sell or refinance your home in the years before it transfers to your heirs.

A revocable trust can protect your home from probate, but it doesn’t offer the protections you get with one that’s irrevocable.

As you start the estate-planning process, there are some important decisions to make. One of those is what will happen to your home when you die. Putting a house in a trust is an option that can help protect your assets and reduce the tax burden on your loved ones.

But after being put in a trust, homes may become inaccessible to their owners. It’s important to research all the options, and if you go with a trust, to choose the right one for you. Here’s what you need to know about putting property in a trust.

Reasons To Put Your House In A Trust

Often trusts are associated with death, but they can actually be useful while you’re alive. When you look into what is a real estate trust, you’ll find that it actually can protect assets throughout your lifetime. If you choose a trust that’s irrevocable, putting a home in a trust could shield it from creditors or legal action. Most importantly, though, that type of trust will help you qualify for programs like SSI and Medicaid, as well as helping you get into certain nursing homes that have income restrictions.

But it’s also important to know how to put a house in a trust so that it maximizes benefits after death. The biggest benefit of any type of living trust is that it keeps your assets from going into probate. If you don’t put your house in a trust, you could find your estate faces higher taxes than if separated into a trust, which can throw those assets into a lower tax bracket.

Reasons Not To Put Your House In A Trust

Before asking should I put my house in a trust, it’s important to have a thorough look through your assets. There are some good reasons to keep your house out of a trust. Many of the benefits you see under “why put a house in a trust” relate specifically to irrevocable trusts, which are trusts that can’t be changed. Once you put your home in that trust, you won’t be able to sell it or refinance it without the written permission of all the beneficiaries.

But putting your house in a trust has reasons beyond lack of access. As you look into how to put property in a trust, you’ll learn that many experts advise working with an attorney. You can do the legwork yourself and sign it with a notary, but you’ll also have to complete the paperwork specific to moving the house into the trust. Lastly, there’s the step of appointing a trustee. You might find these extra steps all go in the “con” column as you’re considering whether to set up a trust.

Do I Need a Trust If I Have a Will?

As you’re learning how to put your house in a trust, you might think that having a will is enough. In some cases, that’s true. But if you’re considering why to put your house in a trust, you might have reasons that aren’t covered by a will.

If you choose to put a house in a trust with a mortgage, you’re also afforded a little extra privacy. While wills are a matter of public record, trusts are private. This means your trust house that passes from you to someone else when you die can pass in secret, although it’s important to note that once the house transfers, the heir will no longer be able to hide it.

Revocable Trust vs Irrevocable Trust: Where Should It Go?

Why put your house in an irrevocable trust? You can’t sell it once it’s in the trust, after all, and you’re still paying the mortgage and property taxes on it. But an irrevocable trust isn’t the only option. If you look at why would someone use a trust, a revocable trust can give you access to your home while also bypassing probate when you die.

If avoiding probate is your goal, you should consider a revocable trust. Some even find that buying a house in a trust lets you set that house aside from the start. The problem with a revocable trust, though, is that assets in them aren’t protected from creditors, so you lose the protective benefits. But there’s another option. Look into should I put my house in a trust or LLC and see if an LLC gives you those protective benefits without the hassle.

Final Thoughts

Putting your home in a trust can be a great option if you have concerns about your assets being safely passed to your loved ones. But it comes with some downsides, as well. We recommend working with a certified financial planner to determine the best way to keep your assets safe while still keeping you in control.

Estate Planning Guide

Intro to Estate Planning


Wills


Trusts


Divorce Considerations For Retirement


Estate Settlement


Share this advice


Stephanie Faris

Stephanie Faris

Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.

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For more information, see our Form ADV Part II and other disclosures.

© 2022 Retirable Inc. All rights reserved.

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Legal

Retirable, Inc. ('Retirable') is an SEC registered investment advisor. By using this website, you accept our Terms and Conditions and Privacy Policy. Retirable provides holistic retirement planning services, which are available only to residents of the United States. You must be at least 18 years of age to become a Retirable Premium user. Nothing on this website should be considered an offer, solicitation of an offer, or advice to buy or sell securities.

Investing involves risk and past performance is not indicative of future results. Increased spending increases the risk of depleting your savings and performance is not guaranteed. It is very important to do your own analysis before making any decisions based on your own personal circumstances.

For more information, see our Form ADV Part II and other disclosures.

© 2022 Retirable Inc. All rights reserved.

We're accredited and certified by