How To Put My House in a Trust in Georgia
Trusts are an important estate planning tool that can accomplish specific goals for a person who creates an estate plan. A trust must be created through a complex legal document before property can be transferred into the trust. The method for transferring an asset into a trust depends on the nature of the asset itself. To put real estate into a trust — including a home — specific steps must be followed.
Creation of a Trust
Before you can deposit an asset into a trust, you need to create the trust. To achieve that goal, it is essential to consult with a knowledgeable estate planning lawyer. Attempting to create a trust on your own with a form or online service and without direct help from a legal professional poses substantial financial and personal risks.
Your lawyer helps you determine whether you can benefit from including a trust in your estate plan. That requires identifying your estate planning goals. It also requires ascertaining what type of trust is suitable to accomplish those goals, because there are many different types of trusts.
Type of Trusts
A revocable living trust can help you avoid probate for assets placed in the trust during your lifetime. If you establish a revocable trust, you can change or terminate the trust at any time. You also retain full control over all assets you place into the trust.
An irrevocable trust can accomplish other goals, including asset protection and minimizing taxes, and may be used for oher specialized purposes, such as Medicaid planning and addressing special needs of a child or adult. A properly drafted irrevocable trust can allow the grantor to retain some control over the assets in the trust. In addition, Georgia law allows mechanisms for the trust to be changed or terminated under certain circumstances. Further, a properly drafted irrevocable trust provides tax basis adjustment for real estate upon the death of the grantor.
When you establish a trust, it is critical to understand what type of trust you create and how the trust impacts your control over assets in the trust. Your lawyer’s role is to ensure you have that understanding before you decide whether to establish the trust.
Establishment of Your Trust
Establishing a trust requires the grantor (person creating the trust) to execute a complex legal document — called the trust instrument, trust document, or trust — that establishes the terms under which the trust operates. Your estate planning attorney drafts your trust to reflect your unique circumstances and estate planning goals. In the trust document, you designate the trustee (and often a successor trustee) who will manage, administer, and distribute the assets. You also name the beneficiaries who receive distributions. Additional trust provisions establish the detailed terms under which the trust assets will be administered, managed, and distributed to the beneficiaries.
Regardless of the trust type or purpose, a trust only applies to and protects assets transferred into the trust. For example, a revocable living trust only prevents probate of assets and property deposited into the trust during the grantor’s lifetime. Any assets not in the trust that remain in the estate on the grantor’s death still go through probate. Similarly, assets outside an irrevocable trust do not have the protections provided by the terms and operation of the trust.
Transferring a Home Into a Trust
While signing a trust instrument establishes a trust, the trust is not operational until assets are transferred into the trust through a process called funding the trust. The method for transferring property into a trust depends on the nature of the property. As a real estate asset, depositing a home into a trust requires following specific steps that apply to changing the title to real property.
Putting Real Estate Into a Trust
Since title to real estate is evidenced by a deed, transferring a home into a trust can only be accomplished by executing and recording a new deed that transfers title of the property to the trust. Specific legal requirements apply to executing and recording a real estate deed. Your estate planning lawyer helps you accomplish this task.
If you have a mortgage, you must notify your mortgage company that you are transferring your home into a trust. You should notify any other lienholders (and your homeowner’s insurance company) as well. If your trust is a revocable living trust, the mortgage company is unlikely to object, but their specific rights in that regard are defined by your mortgage documents. The mortgage company may ask for a copy of the trust or a certification of trust to show that the new owner of the property is in fact a revocable (not irrevocable) trust.
If you create an irrevocable trust, a mortgage company may not agree to having your home transferred into the trust. This issue should be discussed with your estate planning attorney during the planning process, before you decide to create the trust. Federal law provides that a mortgage company must allow the transfer of your residence into a grantor trust without affecting your mortgage. This statement is true whether the trust is revocable or irrevocable.
Funding a Trust With Other Assets
In addition to helping you transfer your home into a newly created trust, your attorney provides guidance with the process of transferring other assets and property into the trust. Completing the funding process — and continuing to implement it as you acquire new assets and property — is the only way to make certain you receive the maximum benefit from including a trust in your estate plan.
Talk With an Experienced Georgia Trust Attorney
Our Cartersville estate planning practice at Asset Protection & Elder Law of Georgia focuses on helping clients identify and accomplish their estate planning goals by using the best approach for their personal and financial circumstances. Determining whether a trust can provide benefits for a client and their loved ones is an important part of our legal services. If a trust would be beneficial for your estate plan, we can help you establish the right type of trust to address your specific needs.
We serve clients throughout the communities northwest of Atlanta, including in Bartow County, Cobb County, Cherokee County, Gordon County, Floyd County and Paulding County. To schedule a consultation, call us at (770) 382-0984 or contact us through our online form.
