Protecting your assets is one step of the estate planning process. For many people, their home is one of their most valuable possessions. While many use a trust to safeguard their assets, is that the right choice for you? Learn more about the pros and cons of putting your house in a Wisconsin trust.
Benefits of a Wisconsin Trust
Creating a trust has several benefits, especially if you include your house in it. Some of these advantages include:
Avoiding probate is one of the main benefits of putting your home in a trust. This legal procedure distributes assets and settles the estate of the deceased. Once the house is placed in a trust, your intended beneficiaries can inherit it without going through probate. That can save them time and expensive court costs.
During probate, all the legal matters become public records. You can avoid privacy concerns when a house is placed in trust. After your death, the property is transferred discreetly to the designated heirs. This process is appealing to those who value the confidentiality of their estate.
Plans for Incapacity
Trusts are not just for end-of-life decisions. They can make provisions if you become incapacitated. You can designate a successor trustee who can manage the property without involving the courts. A trust can protect the property even if you experience any challenges to your health.
Provide Flexible Distribution
Trusts have more flexibility in how assets, including the house, are distributed to beneficiaries. You can create conditions, such as age or achievements, as prerequisites for receiving the property.
Protection from Creditors
In some instances, placing your house in a trust may protect any creditor claims. An irrevocable trust can provide an additional layer of security for your home. Keep in mind that not all trusts offer this level of protection.
Disadvantages of a Trust
Along with benefits, there are a few drawbacks to adding your house to a trust. These reasons include:
Setting up a will is a simple process. When you establish a trust, there are a few more legal steps. You will need to create the trust document, transfer assets, and manage the trust. The initial setup costs can also be expensive compared to a will.
Lose Some Control
You are not a direct owner when you place a house into a trust. Some decisions involving the property must meet the terms of the trust document and require approval by the successor trustees. If you want a hands-on approach to your property, a trust might not be the right option.
While there can be potential tax advantages to placing assets in a trust, there are also potential drawbacks. Depending on the type of trust and its structure, there may be tax implications for both the grantor and the beneficiaries.
Some trusts, such as irrevocable trusts, are difficult to modify or revoke once established. This lack of flexibility could be a concern for individuals who anticipate changes in their circumstances or preferences. Changing the terms of the trust is not as simple as signing a few documents. It could be a long and complicated process for you and your beneficiaries.
Choose the Right Option for Your Estate Planning Needs
There are several pros and cons of putting your house in a Wisconsin trust. Consulting with an experienced estate planning attorney can help you understand your options. You want to make a decision that best meets the needs of your estate and family.
If you would like to learn about how to protect your home in your estate plans, reach out to Collins Law Firm. We proudly serve Southeastern Wisconsin and the Milwaukee area. Contact us or call (414) 207- 6292. Schedule your free and confidential consultation today!