If you own a home, you’ve probably thought about what happens to it after you’re gone or if you become unable to manage it. Maybe you want to ensure your family inherits it without the delays and costs of probate, or perhaps you’re looking for a way to simplify decision-making if you ever become incapacitated. That’s where a revocable living trust comes in.
A trust is a legal tool that holds your home for the benefit of your loved ones. While there are different types of trusts, this article will focus on revocable living trusts—what they are, why people use them, and whether it’s the right move for you.
A revocable living trust is a legal arrangement where you transfer ownership of your home into a trust while keeping full control of it during your lifetime. While you are alive, you can be both the trustee and beneficiary of the trust. You can sell it, refinance it, or even remove it from the trust if you change your mind. When you pass away, the home goes directly to your heirs without going through probate court, the legal process that takes place after someone dies to distribute their assets, settle debts, and validate their will, which can be time-consuming and costly for heirs.
Unlike an irrevocable trust, which is permanent and offers asset protection, a revocable trust is flexible and can be changed whenever needed. This makes it a popular choice for homeowners who want to simplify their estate planning while maintaining control.
A trust keeps your home out of probate court, meaning your heirs get it faster, with fewer legal fees and headaches. Without a trust, the court process can take months (or even years) before your family can take ownership.
Since this is a revocable trust, you can change your mind anytime. You can sell the home, take it out of the trust, or modify who inherits it without any legal restrictions.
A will becomes public record when you pass away, but a trust keeps everything private. Your home transfers to your heirs without public scrutiny.
If you are unable to manage your affairs due to illness or injury, your designated successor trustee can step in to handle things for you—without needing court approval.
If you own multiple homes, putting them in a trust makes it easier for your heirs to inherit them without dealing with different probate laws in different states.
Unlike an irrevocable trust, a revocable trust does not protect your home from lawsuits or creditors. Since you still legally own the home, it can be seized if you have debts or legal judgments against you.
Setting up a revocable trust requires an estate planning attorney and legal fees, which can range from $1,500 to $3,000 depending on complexity.
For the trust to work, you must legally transfer ownership of your home into the trust. Some people forget this step, leaving the home outside the trust, which means it still has to go through probate.
If you want to avoid probate, maintain privacy, and keep full control over your home, a revocable living trust is a great option. However, if you are looking for asset protection or Medicaid planning, an irrevocable trust may be a better choice.
Since estate planning can be complex, it’s always a good idea to consult an estate planning attorney to ensure your trust is set up correctly and meets your long-term goals.