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Accessing Equity In Living Trust Real Estate
A living trust is a legal body with the capacity to own property. |
It enables an individual to collect all of his or her property together in a single document so that it is expeditiously and easily distributed after death. It avoids the delay and costs associated with probate which can last up to 3 years and absorb as much as 10 percent of the estate value.
A living trust is also a legal means of avoiding certain estate taxes. Furthermore a living trust is not required to be registered with the courts and hence provides more privacy than a will.
Technically, the property placed in trust belongs to the trust. But the individual normally appoint himself or herself as the initial trustee so still holds control of the assets. Within the lifetime of the individual as the first trustee, property or assets can be added or transferred out of the trust at will.
The document is known as a ‘Declaration of Trust’, and contains all details of assets within the trust, the list of beneficiaries and how the assets are to be distributed and on what terms. A secondary trustee can be nominated who will govern the trust should the individual become incapacitated.
A sole owner of a property can transfer it to a living trust. The title of the property will need to be changed to reflect the transfer of ownership to the trust. When doing so, several other factors come into play like reassessment of tax, transfer of taxes and other issues, some of which are subject to state laws.
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Accessing Equity In Living Trust Real Estate
