Everyone should have a will, and if you own a home, you want to have a plan for what would happen when you or your spouse dies. But what if you place your home into a living trust?
A question about home ownership, wills and living trusts was posed to writers at The Washington Post in an article, “How a will and living trust will affect your survivors’ ability to sell your home when you’re gone.”
This was the situation: a husband and wife are both retired and hold the house as joint tenants with rights of survivorship. If they’d like to eventually downsize, they don’t want a trust to interfere with their ability to sell the home.
It’s good to have a will in place. Why? Because when the couple owns their home in joint tenancy with rights of survivorship, no probate is required when one spouse dies. The other continues to own the home through the rights of survivorship. However, when that surviving spouse dies, then the will kicks in and probate is required.
Depending on the size of a couple’s estate, using the will to go through probate can be expensive. After the surviving spouse dies, the executor of that will would go to court and be recognized by the court as the representative of the estate. He or she would then be able to sell the home and other assets as needed. The executor of the estate would then present an accounting to the court of all distributions made by the executor to close the estate.
To avoid probate, many people place their properties in a living trust. With this approach, you would transfer the title of your real estate and other property to the trust. Upon the death of the owner of the trust, a successor trustee is appointed, avoiding probate.
A power of attorney is also a useful tool to take care of financial matters, should one or the other spouse become incapacitated. Powers of attorney for financial matters can save stress and headaches.
Equally important is to keep all the paperwork related to the will, homeownership, insurance, mortgage information and any trust documents in a safe place, and tell your executors where the documents can be found.
Reference: Washington Post (September 18, 2017) “How a will and living trust will affect your survivors’ ability to sell your home when you’re gone”