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What Is a Living Trust?
A Living Trust is often recommended by estate planners as an effective way to hold title to real property. When property is held in a Living Trust, title companies have specific requirements to ensure a smooth transaction. Below are answers to common questions about Living Trusts, though this is not an exhaustive guide. For specific concerns, consult your title company representative or seek legal counsel.
Who Are the Parties to a Trust?
In a typical Family Trust, the Trustors (or Settlors)—often a husband and wife—establish the trust and transfer their property into it. They typically serve as Trustees, managing the trust during their lifetime, and are the primary beneficiaries. Their children or grandchildren usually become beneficiaries after their passing, either receiving distributions or continuing the trust, depending on its terms.
In a typical Family Trust, the Trustors (or Settlors)—often a husband and wife—establish the trust and transfer their property into it. They typically serve as Trustees, managing the trust during their lifetime, and are the primary beneficiaries. Their children or grandchildren usually become beneficiaries after their passing, either receiving distributions or continuing the trust, depending on its terms.
What Is a Living Trust?
A Living Trust, also known as an Inter-vivos Trust, is created during the Trustors’ lifetimes, unlike trusts formed through a will after death. It typically terminates after the Trustors’ deaths, with the trust’s assets distributed to the beneficiaries.
A Living Trust, also known as an Inter-vivos Trust, is created during the Trustors’ lifetimes, unlike trusts formed through a will after death. It typically terminates after the Trustors’ deaths, with the trust’s assets distributed to the beneficiaries.
Can a Trust Hold Title to Real Property?
No, the Trustee holds the property on behalf of the Trust, managing it according to the trust’s terms.
No, the Trustee holds the property on behalf of the Trust, managing it according to the trust’s terms.
Is a Living Trust the Best Way to Hold My Property?
This depends on your situation and should be discussed with an attorney or accountant. Common reasons for using a Living Trust include minimizing or delaying estate taxes, avoiding lengthy probate processes, and protecting assets from certain unsecured creditors.
This depends on your situation and should be discussed with an attorney or accountant. Common reasons for using a Living Trust include minimizing or delaying estate taxes, avoiding lengthy probate processes, and protecting assets from certain unsecured creditors.
What Taxes Can a Living Trust Help Avoid?
Married couples may exempt significant assets from taxation and delay taxes after one spouse’s death. Always consult an attorney or accountant before making decisions, as tax rules vary.
Married couples may exempt significant assets from taxation and delay taxes after one spouse’s death. Always consult an attorney or accountant before making decisions, as tax rules vary.
Can I Homestead Property in a Trust?
Yes, if the property meets homestead qualifications.
Yes, if the property meets homestead qualifications.
Can a Trustee Borrow Against Property in a Trust?
Yes, if the trust agreement allows it, which most do. However, some lenders may hesitate to lend on trust-held property, so confirm with your lender beforehand.
Yes, if the trust agreement allows it, which most do. However, some lenders may hesitate to lend on trust-held property, so confirm with your lender beforehand.
Can Someone Else Hold Title for Me “In Trust”?
While some arrange for a third party to hold title as a Trustee, this can be risky and potentially illegal. Only the Trustee of record can legally convey or borrow against the property. Private agreements with a Trustee may not be honored, and title insurance cannot protect against a Trustee acting against your wishes. Always seek legal advice for such arrangements.
While some arrange for a third party to hold title as a Trustee, this can be risky and potentially illegal. Only the Trustee of record can legally convey or borrow against the property. Private agreements with a Trustee may not be honored, and title insurance cannot protect against a Trustee acting against your wishes. Always seek legal advice for such arrangements.
For further guidance, contact a qualified professional to ensure your trust aligns with your estate planning goals.
