Putting Your Home in a Trust: What to Consider

If you have never considered estate planning and asset protection with a lawyer in Summit who handles estate planning and elder law matters, it might sound like a strange idea to you to put your home in a trust. However, there are multiple benefits to placing your house in a trust, and those benefits vary depending on the type of trust and your particular needs. When should you consider placing your home in a trust with assistance from one of the experienced Summit estate planning lawyers at Dempsey, Dempsey & Sheehan? We can provide you with more information about the types of trusts into which you can put your real property, and the benefits and limitations of each.

Understanding Trusts in New Jersey 

Generally speaking, trusts in New Jersey fall into two broad categories (with more detailed types of trusts within these two categories): revocable and irrevocable trusts. Revocable trusts are those that can be amended or modified, or even revoked, by the trustor (also known as the settlor or the grantor, meaning the person who made the trust). Irrevocable trusts, differently, cannot be modified or revoked once they are made. In other words, the terms of an irrevocable trust remain in place regardless of whether the settlor may change their mind later on.

Homes in New Jersey can be placed into an irrevocable or a revocable trust, and there are different reasons for doing each, along with particular benefits and limitations. For both irrevocable and revocable trusts, the assets contained within them do not need to go through probate — they can be distributed directly to beneficiaries.

Placing Your Home in an Irrevocable Trust 

If you create an irrevocable trust and put your home in it, your home will be protected from creditors. In addition, and often more importantly, placing your home in an irrevocable trust can shield it from Medicaid, which can allow you to become eligible for Medicaid coverage for long-term care without having to spend down your assets (including all of the equity in your home). Accordingly, irrevocable trusts are a commonly used tool in Medicaid and long-term care planning.

Placing Your Home in a Revocable Trust 

If you place your home in a revocable trust, you can ensure that your beneficiaries will not have to go through probate. This is the primary benefit of putting real property into a revocable trust. Unlike an irrevocable trust, revocable trusts do not shield property from Medicaid or from creditors, so they are not used in Medicaid or long-term care planning as irrevocable trusts are.

Contact a Summit Estate Planning Attorney

Putting your home into a trust is a very significant and important decision, and it is not one that you should take lightly. At the same time, it is a decision that may be able to benefit many different New Jersey residents. If your circumstances are such that it could make good sense to consider putting your home in a trust, it is important to seek legal advice. One of the experienced Summit estate planning attorneys at Dempsey, Dempsey & Sheehan can provide you with more information and can answer any questions you have about trusts in New Jersey. Once you are ready to begin working on a trust or other aspects of your estate plan, we can assist you. Contact us today for more information.

Source:

law.justia.com/codes/new-jersey/title-3b/