Imagine passing away unexpectedly. Then imagine that you had equity in your home. . significant equity. . . And the bank foreclosed. Your loved ones get nothing. Impossible right? Unfortunately, it can and does happen. Probate is lengthy, and expensive and COMPLETELY AVOIDABLE!
I received a call from a friend of a friend who’s mother had passed away. The grown children all lived out of state, but mom’s house was here. When I asked if she was the executor of her mom’s trust, my heart sank when she said that mom had never set up a trust. Without a trust, there is no one who can legally sign a listing agreement and move forward with getting a property sold. I referred this woman to a probate attorney, and waited. The probate process would assign an executor - someone to make the decisions including hiring a Realtor. Months went by, I was relieved when I finally heard from a 3rd party, who the court had assigned to execute this estate. Unfortunately, it was too late. By the time the executor got up to speed on the assets and liabilities of the estate, the bank that held the mortgage had foreclosed on the home. There was significant equity in the home. Money that could have made a huge difference in the lives of heirs, but with no one making the mortgage payments, the bank took the house back and the heirs got nothing.
Needless to say, if you own property, you shouldn’t be asking yourself if you should put it in a Trust, you should be asking why you haven’t already! In my opinion, the number one reason to put your property into a trust is to avoid probate. Probate can cost 10-15% of the estate and take months or even years to settle. By putting your property into a Living Trust, you determine how your assets will be divided, and when they are to be distributed to your heirs . You will also assign a Trustee to carry out the instructions in your Trust. The Trustee could be one of your heirs/beneficiaries, or it could be an attorney or financial advisor. Another advantage of setting up a trust is privacy. Unlike a will, trusts are confidential, the settlement of your estate is not recorded as public record.
As always, we are here if you have any questions, and yes, we have a fabulous attorney who can help you get your Living Trust established.