Holding Title: A Primer on the BasicsBy Barbara Pronin
The way in which people hold title to a property can have significant legal and tax implications, including whether the property must go through probate upon death and what taxes the heirs must pay when they sell it.
Among the best ways to hold title to homes and other real property, attorneys say, is in a revocable living trust. There are many advantages, such as avoidance of probate costs and delays. Other than the cost of creating a living trust, and deeding real property into the living trust, there are no disadvantages. Until the death or disability of the trust creator, the home and other real estate in the living trust are treated normally. Also, stocks, bonds, bank accounts, automobiles and other major assets can also be held in the living trust and since the living trust is revocable, these assets can be bought, sold and financed normally. If the trustor becomes incompetent, the named alternate trustor (such as a spouse or adult child) takes over management of the trust assets. When the trustor dies, the assets are distributed according to the trust's terms. Privacy is an advantage, too. Unlike a will, which becomes part of the public probate file, the living trust terms remain private. Also, court challenges of living trusts are virtually impossible, whereas will challenges by disappointed relatives occur frequently. But there are other customary options:
Barbara Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade. |
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