What are the pros/cons of putting ownership of the house in a trust?
If you have a living trust, you should put it in the trust. Living trust typically has a clause to automatically include any asset you own that is not yet in the trust so in theory it’s covered and you shouldn’t need to put the house in the trust, but my trust lawyer said if your house is not in the trust, and the unspeakable happens, the probate judge may still initiate investigation on the ownership of the house because it’s a significant piece of asset, which will defeat the purpose of the trust. If the asset is a bank account with a few thousand dollars in it, the judge will most likely ignore and let the trust handle the asset.
Put all your assets under trust to avoid probate.
If you originally get the title with trust, and trustee is someone other than you, you also get some level of privacy.
Also check with your husband’s employer to see if they have benefit for a legal service. Mine does. I can set up a trust with a lawyer for free (besides paying some small amount every month).
Is there any tax and legal implication?
If the house is owned by the trust, is it treated as primary home in tax filing? Will you get 500k capital gains tax exempt?
If someone sues you, does the trust make any difference?
yeah… probably not. new employer is on the cheaper side with perks.
yes, trusts for this use case are passthrough, passes the beneficiaries and are no different for tax purposes.
How about title in the name of LLC and LLC owners are living in the house? Will it still be treated as primary home?
That i dont know. I think you cqn opt for pass through taxa5ion for llc, but ask a cpa, it is not something i know.
Living Trust enables easy inheritance to your heirs without going through big Probate Process (this costs a lot).
It also avoid legal protection, to own the property with multiple marriages and divorces…etc.
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- You will not have primary home benefit with LLC.
- In addition, you need to file taxes every year CA ($800 minimum) and IRS apart from CPA fee minimum $250.
Revocable Trust Trust (and will) is very simple one that costs you one time between $500 and $3000 depending on how complex you make the Trust and Will.
Cons: Correct, easily 100k expense and 9-12 months delay.
Pros: The Trust avg cost is $1000 and easy transfer with death certificate.
I just had consultation session for Estate planning last week. I don’t see any reason not to do Revocable Living Trust other than the cost, it was free for my case. We are planning to do Living trust, Will, Health Care Directive, and Power of Attorney. The hardest part was to talk through who will take care of the kids when we are gone, and glad that we are talking now instead of leaving for unknown.
Revocable Living Trust is a must for rich SWEs in California.
What about house-poor ones?
Stock account also needs to be in trust.
Checking account might be ok. Just leave your ATM passcode to your kids.
And please make trustee someone else that is not you.