Can I Leave My Home in Trust to the Trustee?
Full Question:
Answer:
The answer will depend on the ownership of the house and the terms of the trust agreement. If the house is titled in the name of the trust, it would need to also specify the trustee as the beneficiary of the home's ownership at your death. The trustee can be one of the beneficiaries, so long as they are not the only beneficiary.
It is also possible to create a joint survivorship deed or deed with a life estate retained, which will pass outside probate to the survivor if you predecease the other owner. In the case of a life tenant who holds a life estate, when the life tenant dies, their interest may pass to the remaindermen. Title may also return to the person giving or deeding the property or to his/her surviving children or descendants upon the death of the life tenant--this is called "reversion." Joint tenancy comes into being, or is created, by a specific act of the parties involved. For example, real estate held in this fashion is typically the result of a property transfer by deed. Each joint tenant owns an equal share of co-owned property. When the first joint-tenant dies, the title designation transfers the property immediately and automatically to the surviving joint tenant. This ownership arrangement is said to be a will substitute because it eliminates probate of this particular asset. Avoiding probate does not mean the property will not be included in the taxable estate of the first co-owner to die, or that state and a federal gift and estate taxes will be avoided. Estate planning experts feel joint tenancy is a poor method of planning property transfer for two reasons. First, each co-owner has given up the right to leave the property to anyone other than the other co-owner. Circumstances may change and either tenant may later want to leave the asset to someone else. Either party can usually dissolve a joint tenancy during life, but this may not always be possible or practical. Second, where taxes are an important consideration in planning an estate, holding assets in joint tenancy does not permit one joint tenant to leave their share of the assets in such a way as to save taxes. Upon the death of the first joint tenant, the asset goes outright to the survivor. This causes the survivor’s taxable income and taxable estate to be increased. Due to the tax implications involved, we suggest you consult a local attorney or tax professional who can review all the facts and documents involved.
Please see the information below regarding residence trusts:
http://www.answers.com/topic/qualified-personal-residence-trust