Holding Property in Living Trust

Living trusts are a viable option when trying to decide how the title of your property will be transferred to children or other loved ones after your passing. When a property is held in a living trust, title companies must fulfill requirements in order to initiate the transaction. It is a good idea to consult your lawyer on how to hold the title of your property. If you require general information you may request such from a title company.

What is a Living Trust?

A living trust is typically a family trust wherein spouses are the trustees and their children are the beneficiaries. Those creating the trust and transferring their property are named the trustors and are generally the primary beneficiaries during their lifetime. The living trust usually terminates after both trustors pass away or become disabled or incapicated, as specified by the terms of the trust. The trust is then distributed to the children, or whomever has been named as primary beneficiary. This is a tax-efficient alternative to dividing the property in a standard will.

Reasons for Holding Property in Living Trust

• Avoids lengthy probate
• Shelters the property from certain unsecured creditors
• Minimizes or postpones death taxes
• Allows married persons to exempt a significant part of their assets from taxation and may postpone taxes after one spouse passes away
• Authorizes the trustee to borrow against the property as permitted by the terms of the trust (exclusions and restrictions based on the terms of the lender for their policy on property held in trust will apply)