Put My Home in a Trust
As a mortgage loan officer, people often ask me, “should I put my home in a trust?”
In my opinion (and most expert’s opinion), anyone that has a living relative should have their home titled in a family trust. Even so, the great majority of homeowners hold title (deed) in their own name.
This is just something they don’t teach us in high school! Who is going to tell you?
If something were to happen to you, causing your death— and your home is in your name only— your family is going to have very expensive legal fees and will need to go to court. It’s very time consuming and expensive. Even if you have a Last Will and Testament. A will does not save your family from probate court. Will they even have the funds for an attorney? Will the home go back to the bank?
If you are married, the home title will go to your spouse, if you die. But then, your widowed spouse should put the home in a family trust at that point.
Finally, although it’s not common: You and your spouse could pass away together. If you both die, your children or family will be back to the probate situation we discussed about.
Benefits of a Living Trust
So, “what are the benefits of a Living Trust?”
Let’s say your name is Jane Doe.
A professional would create a document called The Jane Doe Family Trust.
In the family trust, we would list other family members. Perhaps Jane has three children, so the trust document contains four names, in this example.
Next, a Quit Claim Deed would be prepared. We would transfer the deed of the home from Jane Doe, to the Jane Doe Family Trust. The trust is the new owner of the home.
If something happens to Jane, the home goes to the children without any legal hassles. Also, we can change the trust anytime. For example, let’s say that Jane decides one of her children is no longer worthy of the home. In that case, a new trust is prepared, minus one bad child.
My Personal Experience With This
Long ago, I was married and my wife passed away. We owned three homes at the time. Two of them were in my name (both rentals), but our primary residence was in her name only. In reality, we should have held all three homes in a family trust.
After my wife died, Wells Fargo refused to communicate with me. She was the only name on the title, and they said they would only deal with her. I couldn’t refinance— it was a nightmare. Wells Fargo did not care about her Last Will. They hung up on me over and over again.
The bank ended up taking my home, and it all could have been avoided with a very simple document!