Read more about the article Why Would I Put My Home in a Trust? – Annapolis and Towson Estate Planning

Why Would I Put My Home in a Trust? – Annapolis and Towson Estate Planning

Putting property in a trust can make managing and distributing your assets — including your home — easier after your death. It can also have legal and tax benefits.

Bankrate’s recent article entitled, “How, and why, to put your home in a trust,” says that a real estate trust is a legal arrangement in which the owner of a home, known as the “grantor” or “settlor,” transfers ownership of the property to another entity or individual, known as the “trustee.” The trustee manages the property for the benefit of the grantor and any named beneficiaries of the grantor’s estate.

You can place your home into a trust by signing a deed that names the trustee as the property’s new owner. The deed must be recorded with the local county recording office, and then the trust is the legal owner of the property.

The home’s original owner will usually name him- or herself as the trustee, so they can maintain control of the property. However, the original owner can name someone else as the trustee. This can be helpful in case the original owner passes away. Trustees are frequently adult children of the homeowner, who will inherit the property upon the homeowner’s death.

Trusts are often used for tax, estate planning, or asset protection purposes, as — depending on the type of trust — the property can be protected from creditors and transferred directly to the beneficiaries without going through probate. Two primary types of trusts pertain to real estate: revocable and irrevocable.

Also called a living trust, a revocable trust can be changed or dissolved at any time by the grantor (creator) of the trust. A revocable trust lets a grantor control the property and make changes to the trust during their lifetime. The grantor retains the right to modify or dissolve the trust. The grantor can act as a trustee, manage the property, or appoint someone else.

A revocable/living trust states the original homeowner’s wishes upon death. When the grantor passes away, the property in the revocable trust is distributed to the grantor’s beneficiaries according to the terms of the trust agreement.

An irrevocable trust, as the name implies, is more permanent and can’t be terminated or modified by the grantor after it’s been created, unless the beneficiaries agree to the change.

Contact us to review your estate plan with one of our experienced estate planning attorneys.

Reference: Bankrate (February 21, 2023) “How, and why, to put your home in a trust”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys 

Read more about the article Estate Plans Can Protect against Exploitation – Annapolis and Towson Estate Planning

Estate Plans Can Protect against Exploitation – Annapolis and Towson Estate Planning

Financial exploitation is far more common than most people think, especially of the elderly. There are several types of individuals more at risk for exploitation, according to a recent article from mondaq titled “How An Estate Plan Can Protect Against Financial Exploitation.” These include someone with a cognitive impairment, in poor physical health, who is isolated or has a learning disability.

Exploiters share common characteristics as well. They are often people with mental health illness, substance abusers or those who are financially dependent on the person they are exploiting.

There are warning signs of financial abuse, including:

  • Changes in patterns of spending, transfers, or withdrawals from accounts
  • Isolation from friends and family
  • Unexplainable financial activity
  • An inability to pay for routine bills and expenses
  • Sudden changes to estate planning documents, beneficiary designations, or the addition of joint owners to accounts or property titles

One way to avoid financial exploitation is with an estate plan prepared in advance with an eye to protection. Instead of relying on a durable power of attorney, a funded revocable trust may provide more robust protection. A revocable trust-based plan includes safeguards like co-trustees and a requirement for independent party consent to any trustee change or amendment.

A support system is also important to protect a person if someone is attempting to exploit them. Estate planning attorneys team up with financial advisors, CPAs and other professionals to create a plan to avoid or end elder abuse. Other steps to be taken include:

  • Consolidating accounts with a trusted financial advisor, so all assets are easily observed
  • Have a family member or trusted person receive copies of account statements
  • Consider a credit freeze to avoid any possibility of being coerced into opening new credit card accounts or taking out loans.
  • Establishing a budget and sharing information with advisors and a trusted person, so any spending anomalies are easy flagged.

Elder financial abuse is an all-too common occurrence but taking proactive steps to safeguard the vulnerable family member is a good strategy to deter or thwart anyone intent on taking advantage of a loved one.

Reference: mondaq (Sep. 23, 2022) “How An Estate Plan Can Protect Against Financial Exploitation.”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys

Another Reason Why You Need an Estate Planning Attorney – Annapolis and Towson Estate Planning

The saying ‘you don’t know what you don’t know’ is most apt in estate planning. A well-meaning person may create a will with the goal of leaving property to grandchildren, only for the children or their parents to learn after the grandparent’s passing the law does not permit property to be transferred. A recent article titled “The Arcane Law That Could Derail Your Inheritance Plans” from yahoo! entertainment is a good example of the importance of estate planning attorneys to create effective estate plans.

The rule against perpetuities may prevent a property from remaining in the family, if it takes too long for the will’s conditions to be met.

The rule against perpetuities creates a standard for when an interest in land or property must vest. The rule against perpetuities stipulates that a will, estate plan or other legal documents intending to transfer property ownership more than twenty-one years after the death of the primary (decedent) becomes void.

This rule means a person can’t legally guarantee their grandchildren, great-grandchildren or other heirs in the future may retain ownership of the grantor’s property. This may be an obscure law. However, the problem becomes real if and when someone should challenge the will, as this is a legitimate legal argument to be made.

This is an old law dating back to 17th century England, when courts wanted heirs and descendants to be able to buy and sell land without the influence of ancestors who tried to control property over many generations. The United States adopted this law and while many legal authorities see it as being outdated, only some states have drafted modifications or new laws to change it.

In 1986, thirty-one states addressed the problem by drafting a “wait and see” approach, meaning an interest in the property must vest within ninety years of the implementation of a will or life estate. This has alleviated the limit, meaning a will or other transfer of property has nine decades to vest before it becomes void.

If your estate plan includes leaving assets for grandchildren, including real estate property, contact us to speak with one of our experienced estate planning attorneys about this admittedly arcane law. If your state is one that has not adopted the “wait and see” approach, you will be glad you prepared.

Reference: yahoo! entertainment (Aug. 20, 2022) “The Arcane Law That Could Derail Your Inheritance Plans”

Sims & Campbell, LLC – Annapolis and Towson Estate Planning Attorneys