Engaging in the proper estate planning can help you minimise estate taxes and provide assets to your beneficiaries. One type of trust that you could set up is the irrevocable trust. If you set up this type of trust, you can put real estate into it. The decision to put your house in an irrevocable trust involves several factors for consideration.
To decide whether you want to put your house in an irrevocable trust, you need to understand how this type of arrangement works. With an irrevocable trust, you can put many different types of assets into it. A trustee will be in charge of the assets for you, until they are distributed to a beneficiary that you choose. Once you set up the irrevocable trust, you cannot change any of the terms of it.
Protect From Creditors
If you are worried about losing any of your assets to creditors, putting them into an irrevocable trust may be a good idea. By doing this, you are technically removing the property from your estate. This means that your creditors have no legal right to go after the assets. If you want to make sure that your beneficiaries get your house in the future, putting it into an irrevocable trust can ensure this.
Avoid Estate Taxes
If you have a large estate, it may be subject to estate taxes when you die. The estate tax exemption changes frequently and if you can get the total value of your estate under this exemption, it can ensure that your beneficiaries do not have to pay any estate taxes. When you put your house into the trust, it removes it from your estate and ensures that your beneficiaries will not have to sell it to pay estate taxes.
When you put your house into an irrevocable trust, you can set it up so that you still have access to it. This would allow you to continue living in the house even though you are not technically the owner of it anymore. You can set up the trust to allow you to use the house for a certain number of years. After that, you could pay rent to the trust or the beneficiary, depending on who owns the house.