In Arizona, you can gain numerous benefits by placing your home in a trust. Doing so ensures that your home avoids probate and receives tax and other benefits. The following explains more about the how and why behind placing your home in a trust as part of your estate planning.
How to Put Your Home in A Trust
Establishing a trust requires you to create and sign a trust agreement with you, an attorney or a loved one as trustee. You can dictate the terms of the trust, and a new deed to the house must be signed, designating the trustee as the home’s owner. The deed gets recorded at the County Recorder’s office, and the trust legally owns the house.
Different types of trusts exist, and because the trust documents are legally binding, you may want to seek professional help in setting up your trust. Once you complete the process, you can receive the following benefits.
Your family may need to pay thousands of dollars in legal costs and wait up to a year before receiving anything from your estate if it goes through probate. A trust avoids probate by transferring ownership of your assets directly, without a need to spend time and money in court.
A trust can also help keep the property in the family for generations without changing names on the home’s title each time it changes hands to a new family member.
Once assets transfer into certain trusts, you can protect them from creditors and legal action. The protection extends to the assets’ beneficiaries as long as the trust remains the owner of the assets. For this protection, you must use an irrevocable trust and transfer ownership of your home from your name to that of the trust. Since the trust, not you, legally owns the house, creditors and attorneys cannot access the real estate asset.
Cut Down Estate Taxes
When you put your home into a trust, you are removing its value from your estate, which means your taxable estate becomes smaller. Your estate will only owe taxes on the remaining assets outside your trust.
Keep Your Financial Affairs Private
When you set up a trust and transfer your property, the property will not go through probate. Legal documents from the probate process become public information, so the details of your trust remain private, which allows you to keep your financial affairs confidential.
Understanding the benefits of placing your home in a trust can help simplify the transfer of your assets, keep your finances confidential and save money for your heirs.