If you place your home in a trust, you become the trustee of the property. When you die, your successor then becomes the trustee.
Being the trustee of a property gives you certain powers over where your home will pass once upon your death. It can also enable you to shield your estate from future economic problems, says Investopedia in the recent article, “Buying a Home in Trust.”
First, decide who will have the legal right to sell the home. Then, you need to determine what type of trust to set up for the estate. Let’s look at the two basic types: the revocable trust and the irrevocable trust.
A revocable trust is an agreement that establishes the rights and heirs of the estate. The owner of the trust has full control at all times and can change it, when he or she wants. Based upon the way in which you set up the documents, all or one of the future trustees can also change the document at any time. Revocable means “capable of being canceled.”
In contrast, an irrevocable trust generally doesn’t allow any changes or terminations of the trust without permission of the beneficiary. The trustee acts more like a fiduciary who’s charged with maintaining the assets for the beneficiary. Irrevocable trusts can protect assets from creditors, if the assets were placed in the trust before the credit problems.
Whether creating a revocable or an irrevocable trust, it’s important to work with an experienced estate planning attorney. However, it is important to be aware of how putting a home may impact your eligibility for Medicaid, if that may be a future issue.
Buying a home in a real estate trust can give you and your beneficiaries advantages that otherwise wouldn’t be available.
Reference: Investopedia (October 13, 2018) “Buying a Home in Trust”