Real Estate Can Be Put in a Trust
Trusts are valuable estate planning tools that have many different uses. Without the help of a attorney well versed in trusts, it can be difficult to know when to use a trust, what type of trust to create, and what property to transfer into the trust. One question that often arises is whether you should be real estate in your trust.
In Florida you may want to discuss your thoughts with an experienced trusts lawyer who can explain the pros and cons of trusts as well as the benefits of transferring real estate into a revocable trust for example.
Benefits of Putting Real Estate in A Trust in Naples
There are benefits of putting real estate in a trust in Florida.
1. The trust beneficiaries will inherit the property without having to go through probate. Probate is a lengthy, expensive, and public court process. When an estate is probated in Naples, you must pay filing fees, attorneys’ fees, and other administrative costs (appraiser’s fees, accounting fees, etc.). These expenses can easily end up being thousands of dollars. A trust avoids probate-related costs. Furthermore, probate can take months, if not years, to complete. Trust property transfers immediately at death. Finally, probate is public. When real estate is in the trust, the transfer remains private and less vulnerable to challenges.
The appeal of avoiding probate is especially great if you own property in multiple states. Without a trust (or another mechanism to avoid probate), your executor will have to open a separate probate proceeding in each state. Your executor will have to deal with different rules in each state, increased fees, and stress.
2. Real estate can be managed by your successor trustee if you become incapacitated. If an accident or illness leaves you incapacitated and unable to make decisions on your own, your successor trustee automatically has the power to manage the assets in the trust, including any real estate. They can act on your behalf to pay bills, sell the property, enter into lease agreements, etc. You can appoint anyone you trust as your successor trustee. Without a trust (or another document, such as a durable power of attorney), your family may have to petition the court for a conservatorship.
3. Putting real estate in an irrevocable trust could provide tax benefits and Medicaid eligibility. If real estate has been transferred into an irrevocable trust, it is removed from your taxable estate. This has the effect of lowering your federal estates. As of 2023, the federal estate tax exemption is $12.92 million per individual. Furthermore, real estate in an irrevocable trust is safe from the Medicaid estate recovery program and protected from most creditors. Irrevocable trusts cannot be modified and must pay their own tax returns.
Trust Administration in Naples
Even though a Trust is not part of the Probate estate, your trustee must still perform many duties in accordance with the Trust documents, including making prudent investments and correct distributions, notifying beneficiaries, preparing documents, filing tax returns and paying taxes, distributing Trust assets, holding property in a sub-trust as appropriate, and more. Trust documents can be intricate, lengthy, and highly complicated so may be difficult to properly administer. however trustees can be held personally liable if they make mistakes. If you are a trustee or beneficiary dealing with trust administration, you may benefit from talking about your concerns with a Lawyer familiar with trusts and proper administration.
Should I Put My Real Estate in a Trust in Naples?
Whether you should put real estate in trust depends on your unique situation. An attorney can help you decide what is best for your situation and help you navigate the process.
Call Naples Trusts Lawyer, James Nici
If you have questions about whether to put real estate into a trust, trust administration, or estate planning in general, you should contact Nici Law Firm. James R. Nici is an experienced Naples attorney with over 25 years of experience. Contact our office today at (239) 449-6150 or use our web form to set up a free consultation.