Holding Title: The BasicsBy Barbara Pronin
The way in which homebuyers 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 most recommended ways to hold title to homes and other real property is in a revocable living trust. Among its many advantages are the avoidance of probate costs and associated delays - and apart from the cost of creating a living trust, and deeding real property into it, there are few, if any, disadvantages. Until the death or disability of the trust creator, the home and/or other real estate - as well as any stocks, bonds, bank accounts, automobiles and other assets also held in it - may be bought, sold and financed as usual. If the trustor becomes incompetent, the named alternate trustor—typically the 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 another advantage. Unlike a will, which becomes part of the public probate file, the living trust terms remain private, In addition, court challenges to a living trust, unlike challenges to a will, are almost never successful. But there are other customary options for holding title:
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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