Should I Consider Putting My Real Property Into a Trust?
Trusts are a central component of many New Jersey estate plans. There are various benefits that trusts provide in general, such as allowing beneficiaries to receive assets without having to go through probate. There are also many specific types of trusts that a person can establish in New Jersey for particular purposes, such as providing for a disabled adult child or protecting their own assets from Medicaid if and when they need long-term care.
If you are looking for a way to leave assets to your beneficiaries that allows them to avoid probate, you will most likely want to consider a trust. If you do create a trust, should you put your home and other real property into it? Our Summit estate planning lawyers can tell you more about putting real estate into a trust.
Putting Real Estate Into a Revocable Living Trust
For anyone considering the possibility of putting a home or other real estate into a trust, the first question you will want to think about is why you are thinking about putting your real property into a trust. If the goal is to allow your beneficiaries to inherit your home, vacation property, or other real estate without the complications of probate, you can likely create a revocable living trust and place your home (or other real estate) in it.
With a revocable living trust, you can make any changes to the trust that you want during your lifetime, or even cancel it entirely. This is a flexible type of trust that is, at its name suggests, revocable. However, assets in a revocable living trust are still going to be part of your taxable estate. If your assets are close to or over the federal estate tax threshold, you may want to consider another type of trust.
Using a Qualified Personal Residence Trust or Other Irrevocable Trusts
If you want to place your real estate in a trust for the purpose of minimizing estate taxes, you will likely need to create a type of irrevocable trust. You might have heard of a qualified personal residence trust (QPRT) and may be wondering if this is the right type of trust for you.
A QPRT can reduce estate taxes since your residence will not be considered part of your estate, and you can continue to live in your home during the time period set forth in the trust. However, a QPRT may not be the right type of trust for everyone in New Jersey. If you want to reduce estate taxes but also want to include other real estate, you should talk with a lawyer about other irrevocable trust options.
Contact a Summit, New Jersey Estate Planning Attorney
When you are working on estate planning in New Jersey, it is important to discuss different types of trusts and how certain kinds of trusts may be able to protect your assets and provide benefits to your loved ones. As we have discussed, there are many reasons that you may want to consider putting your home or other real estate into a trust, and one of the experienced Summit estate planning attorneys at Dempsey, Dempsey & Sheehan can discuss your options with you in much greater detail. Contact our firm today to find out more about your estate planning options and how we can help.
Sources:
law.justia.com/codes/new-jersey/title-3b/
law.cornell.edu/wex/qualified_personal_residence_trust_(qprt)
