Pwning a house allows many people to build the bulk of their personal equity. When writing a will, a home reflects one of the most important assets the testator could leave to a beneficiary. Owning a home with tremendous responsibilities and numerous costs. So, a testator may wonder if a beneficiary is up to the ownership duties. Perhaps putting the home in a trust is the preferable option.
The estate planning process might be more involved than many realize. Powers of attorney and health care proxies are additional legal documents that might be necessary. A trust is another, and devising a trust could come with upsides that overcome a will’s limitations. One reason someone might choose a trust over a will centers on avoiding probate. Other benefits exist, and some could fit into the plans of a person bequeathing a home.
With a trust, the grantor gains more power over decisions after he or she dies. A trust might contain specific instructions for handling the property, and the directions could present directions to beneficiaries unfamiliar with homeownership. Inexperience may lead to foreclosures or other issues. Directions in a trust may help loved ones avoid losing the house.
Trusts also provide protections to the heirs. For example, a mortgage company might not demand full payment when the borrower passes away. Beneficiaries could prefer to make the mortgage payments rather than liquidate a house to pay the loan.
Obligations may exist when someone passes away, and settling debts becomes a responsibility performed during probate. With a trust, protections from estate taxes, Medicaid recovery, and various creditors may aid heirs.