When Should I Put My Home in a Trust?

When should I put my home in trust? It’s a question we hear a lot, especially when people learn we are estate planning attorneys. That, and when should I even get a trust? These questions basically go hand in hand and basically require the same answer.

No Time Like the Present

When do you put your home in trust? As soon as you get it. Before you go, there are many reasons why you should put your home in trust and do so quickly. This is not only because we create trusts for clients all day. We would give the same advice even to those who don't intend to use our services. Again, as soon as you have a trust, you should put your home in trust and if you have a home but don’t have a trust, then you should get a trust and then put your home in it right away. There simply is no reason to wait. The potential downsides are just too great to leave your home outside of your trust.

Broken Record: Avoid Probate

Let’s get into a couple reasons why there is no time like the present to put your home in trust. The most important reason is avoiding probate. We have discussed avoiding probate many times already, so we won’t go into it all again here, but keep in mind, avoiding probate saves your heirs massively in time, money and headache. If you are a numbers person and you want to hear how much probate can cost (and spoilers, it’s a lot, 5 figures minimum), then read our blog HERE on the real cost of probate. We go into great detail on how fees are calculated.

Simplification of Administration of Your Estate

Another important reason to put your home in trust and do so quickly is because it is significantly easier to move a home to the beneficiaries of a trust than to beneficiaries of an estate in probate court. In essence, as soon as a death certificate comes in, you are able to distribute real estate and the only cost is a small recording fee and perhaps the fee if you have someone create the deed for you, which you should do. We recommend hiring an attorney, or a title company.

If we are dealing with probate, then you cannot distribute that property until you get judge approval to do so. On top of the probate court problems, it has happened a few times where we record the judge's order to distribute a home in probate court, only for the county recorder's office to not understand how the ownership interests are to be reflected on title and thus put the wrong people on title to the home. Every time we have seen this happen, the county added more people on title to the property then there should have been, and each took months to fix.

Privacy Concerns

Then we have the fact that trusts keep matters private. Probate is court, meaning public court records open to inspection and hearings open to the public. Transfer on death deeds are also public in that your chosen beneficiary is on the face of the deed by law, which is a public record. Deeds transferring property to a trust only provide the name of the trust, not who the beneficiaries are (which is the same for most states, as it should be. Looking at you Arizona).

How to Put Your Home in Trust

Lastly, let’s discuss how to put your home in trust. We have discussed this in detail before but to be brief – you transfer with a deed, transferring the property from you as an individual to you as trustee of your trust. Of course, you will need to record that deed with the county recorder where the property is located, but that is a straightforward process. Make sure you check what county administrative forms are required to be submitted with the deed. For example, here in California, all instruments to be recorded need to include a signed Preliminary Change of Ownership Report or else pay an extra $10 per deed. That report just tells the county what you are doing.

In Nevada for example, you need to include a Declaration of Value form which has information from the deed and where you would state values for the transaction – which, if you're transferring property in or out of a trust, it's not a sale, so you'll be marking zeros down the line. Of course, speak to a local attorney for your specific situation.

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