4 Important Factors To Consider If You Want To Create A Real Estate Trust

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4 Important Factors To Consider If You Want To Create A Real Estate Trust

If you want to ensure that your loved ones receive your property or the profits from the property sale after you die, a real estate trust can be created. By putting your real estate in a trust, your beneficiaries will have a legal claim to what you've left for them, and your trust can also help prevent fraudulent claims by unauthorized people. Before you begin the process of creating a real estate trust, you should keep these four important factors in mind.

1. Why a Trust May Be Better Than a Will

When most people think of leaving assets to their loved ones, they often choose to draft a will to name the beneficiaries and the specifics of what they'll receive after the will-maker's passing. A trust, however, is often better for allocating real estate and other larger assets. Unlike a will, a real estate trust usually involves no court intervention (probate) after the grantor's death and is usually handled privately. Since the details of a real estate trust are kept private, you also won't have to worry about the details of your real estate distribution becoming public knowledge.

2. The Differences Between a Revocable and an Irrevocable Trust

You'll have the option of choosing between a trust that's revocable or irrevocable. If you think that you might want to make changes to the provisions in the real estate trust and want to retain full ownership of the property while you're still living, a revocable trust may be your best option. An irrevocable trust can only be changed by an appointed trustee, but you won't have to pay any more property taxes since you'll be relinquishing the property's ownership while you're still alive.

3. The Essential Documents You'll Need

In order to put your real estate in a trust, you'll need to show specific documents that prove that you're the legal owner. Some of the most important documents that you'll likely need include your:

  • Property deed
  • Certificate of trust
  • Tax forms (federal and local)
  • Certificates for stocks, bonds, and/or mutual funds
  • Condominium or homeowner's association authorization (if required)

4. Who to Turn to for Assistance

You can try to put your real estate in a trust on your own or with help from someone you know, but you can also get professional support if you want further help with managing the details. A financial planner or an estate attorney can assist you with creating the trust and will make sure that everything in your trust meets the legal requirements. A professional who works regularly with real estate trusts can also help you appoint a trustee if you want someone to manage your estate.

A real estate trust may allow you to transfer your property faster and easier and also help your beneficiaries avoid the probate process. You can hire a professional who understands the ins and outs of real estate trusts to assist you with creating your trust.

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