Using the Quitclaim to Keep a House Out of Probate
We’re glad you asked. You might have heard that a living trust can…
Have your property bypass the costly, time-consuming probate court process when you die.
Be modified if you change your mind, and even let you put the property back in your own name while you are alive.
Name a successor trustee with the power to pass your property to whomever you designate as the new owner.
All of the above are reasons many people use this method of passing their property along after they die. And a home is a typical piece of property that people put into a living trust.
Importantly, a living trust is a revocable trust — it’s a trust you control during your life, and can change. Curious as to how it works? Here, we outline the basics of using a living trust to pass a lifetime home along to its future owner(s).
revocable (living) trust, you can assume the role of trustee, and stay in
control of your real estate during your lifetime.
After you pass away, your living trust becomes a substitute
for probate. This is especially helpful if your estate would otherwise face multiple
probate processes because you have real estate in several locations. It is also
a helpful way to pass a home along to children when they become old enough to
receive it, as the trust can direct a title change to a child at a specified
If you need to modify your estate plan due to children
growing up, a marriage or divorce, or other significant changes in the makeup
of your household, or because of your age or physical needs, you may. You can take
the asset out of the trust, assign a new trustee, change your beneficiaries, or
modify other terms of your trust.
For many homeowners, this is the best of both worlds in
estate planning. You keep full control during your life, but seamlessly transfer
the home on when you pass on, avoiding the time, expense, and stress of
probate. Still, there are plenty of things to know before making this decision,
as we’ll observe in this article.
The information presented in this article is not all-encompassing, nor is it meant to be construed as professional legal advice. Because homestead exemption laws are complicated, consult a qualified attorney with questions regarding homestead exemptions and living trusts in your state.
Via Black’s Law Dictionary, 8th ed., a homestead is “[t]he house, outbuildings, and adjoining land owned and occupied by a person or family as a residence. As long as the homestead does not exceed in area or value the limits fixed by law, in most states it is exempt from forced sale for collection of a debt.” A homestead can only be designated in one jurisdiction, generally where the owner maintains permanent residence.
Though the complexities of a living trust make these
documents look significantly more complicated than they actually are, about a
fifth of all Americans have living trusts—sometimes called revocable trusts or
inter vivos. Living trusts don’t have to be complicated. Indeed, they’re an
ideal way to protect your assets after you’re gone, while ensuring your heirs
have quick access to their inheritance. Trusts are highly customizable, and you
can create just about any system of disbursement in your trust creation
documents. For instance, many parents leave their children a trust fund that
the child can only access upon completing college or attaining the age of 30—or
if the trustee deems that accessing the funds is in the child’s best interest.