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Friday, July 24, 2015

The Advantages and Disadvantages of Putting Your Home into a Trust

There are different reasons for putting your home into a trust; some may want to provide better protection for their assets from creditors. Others may want to reduce probate, or estate and gift taxes. Trusts can also assure a transfer to an heir under a set of conditions. Whatever the reason may be, it is important to consider the different options. There are revocable living trusts and irrevocable living trusts.

Revocable living trusts are good because they are changeable (revocable), you are able to make changes to the trust conditions as long as you are alive. This kind of trust will have rules for all of your assets and where they are going to go when you die. Also, since you will be the creator of the trust you can choose whomever you want to be your trustee. The advantages of this kind of trust are you can avoid probate and your privacy is preserved, you can transfer your personal assets and have them remain private. The disadvantages would be that you have to re-title your property in the name of the trust. Also it can be expensive to plan, so be prepared for the costs of a lawyer.

Irrevocable trusts are good for minimizing estate taxes, but they make you give up control of your estate. When you transfer your estate into the trust it is no longer yours so therefore it is no longer part of your taxable estate.  The downside would be that the estate might have gift taxes since it is considered a gift to the trustee or heir.

Estate planning can involve a complex web of tax rules and regulations.  Tax laws surrounding estate planning concepts are subject to change.  You should consider the counsel of an experienced-estate planning attorney or other professional before implementing any strategy.

Posted by: Patrick Carroll at 9:52 AM
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This material is intended for historical purposes and may be outdated. Its contents should not be relied upon as current information. For more up-to-date information regarding these topics, contact your financial professional.

All information herein has been prepared solely for informational purposes, and it is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. Securities offered through Triad Advisors, member FINRA/SIPC. Advisory Services offered through ACI Partners, LLC. ACI Partners, LLC is not affiliated with Triad Advisors.