A Medicaid Planning Lawyer Dallas, TX Discusses Putting Your Home in a Trust
Is there any reason to put your home in a trust? To answer it simply, yes. One reason to put your home in a trust is to avoid the probate process. Another important reason is to avoid attachment of your home and assets in the event you need to go live in a nursing home someday.
Many people believe that a trust can offer protection to your assets from creditors or would remove your home from the taxable estate. However, it is important to understand the benefits that a trust is and is not able to provide. To understand how to effectively estate plan, you should speak with an experienced Medicaid planning lawyer. The professionals at Brandy Austin Law Firm, PLLC have extensive legal experience in estate planning and we can work to ensure your assets are as protected as you would like.
Should I make my family member the trustee?
It is not normally advised to have a family member and/or a beneficiary act as trustee, as it can heavily strain your family relationships. It is recommended to have an independent third party or a corporate trustee manage your assets and to execute the grantor’s wishes. The responsibilities of a trustee are very extensive and there can be great penalties with the law if there are functions that are not handled correctly. By having someone other than your family perform these responsibilities, it decreases any potential fights about any perceived misconduct or unfairness related to how the assets are distributed throughout family members and beneficiaries.
A revocable trust is a trust that is able to be changed, revoked, or dissolved. If a grantor’s house is put in a revocable trust, the grantor is able to take the home out of the trust, sell the home, refinance, or do anything as they would normally do with their own home. They do not need any special permissions to do anything.
There are also benefits that revocable trusts can offer to beneficiaries at the time of the grantor’s death in terms of a step-up basis. This is a great benefit as compared to any gifts made throughout the grantor’s life. Step-up basis essentially means that the tax basis that the beneficiary will be taxed on for the inherited property will be at the market value of the home at the time of the grantor’s death. This can be a large difference for any assets that appreciate. If a beneficiary decides to sell the property, they would owe none or very little capital gains.
Placing Your Home in a Trust
The main reason someone would put their home in a living trust would be to avoid the expensive and long probate process when they die or to protect the equity from being eaten up by future medical and/or nursing home care expenses. A Medicaid planning lawyer can advise whether o not a revocable or irrevocable trust would be appropriate for your particular situation. Since you are able to access the assets in your revocable trust at any point in time, having your assets in a revocable trust does not protect your assets from creditors or make the home not able to be part of your taxable estate when you die like an irrevocable trust would.
If you are unsure of the best way to handle your assets when you die, it is recommended you speak with an experienced Medicaid planning lawyer Dallas, TX clients recommend from Brandy Austin Law Firm, PLLC. Contact our team of dedicated professionals to discuss your goals and find helpful solutions for your needs.