Should I Put My Home in a Trust?
Lisa Marie Presley died on Jan. 12, 2023, at the age of 54. The only daughter of Elvis and Priscilla Presley was the heir to her father’s estate, which included their Graceland home and all of the property in it. Lisa Marie had secured Graceland for her beneficiaries by putting the property into a trust versus leaving it in her will. But why?
By utilizing a trust instead of a will, Presley’s goal was to avoid probate court and protect the estate if she would have become incapacitated at some point in her life.
Most estate planning attorneys agree that putting a home and other valuable assets into a trust is the best way to avoid probate court, regardless of the value of the home.
What is probate?
Probate is a court process where the estate of a deceased individual is administered so that creditors are paid, assets are gathered, and property is distributed to rightful heirs and beneficiaries.
When a person dies and leaves a will, probate is required to distribute the contents of a will to beneficiaries. With a will, an individual may designate anyone they wish to receive their assets, as long as the person can do so and was not influenced. If a person does not have a will in place, his or her assets pass to certain family members per Michigan law.
The probate process, which often lasts six months to a year (or more), can cost thousands in legal fees. Another drawback is that probate proceedings are usually open to the public, so there is little privacy involved.
What is a trust?
A trust is an estate planning tool that helps people avoid the probate process, while also securing assets and property for beneficiaries. The person creating the trust is the “grantor.” When someone places assets and property in the trust, their appointed “trustee” will be in charge of and must manages the trust. The person who benefits from the trust is the “beneficiary.”
There are two types of trusts, revocable and irrevocable. With a revocable trust, the trust grantor may designate him or herself as the trustee and take control of assets within the trust. The grantor is free to change the beneficiaries or undo the trust at any time. With an irrevocable trust, the grantor waives certain rights to control the trust. The trustee becomes the legal owner, and the named beneficiaries are set. The grantor can do little to change the agreement.
What are the benefits of putting property into a trust?
By placing property into a trust, ownership of the real estate is distributed to beneficiaries in a matter of days or weeks after the grantor has passed. Additionally, in case of the grantor’s incapacity, the successor trustee can manage and take care of assets in the trust, including the home.
How do I put my home into a trust?
With the help of an attorney, the first step is to create a trust, but creating the trust is only the first step. Funding a trust is the process of transferring assets to a trust account. To move real estate assets into a trust, the process usually involves the preparation of the trust followed by the recording of the property’s deed in the county property records.
Help is available
If you would like to put your home or other assets into a trust, contact an estate planning attorney by calling 586-726-1000 or by visiting www.orlaw.com.