TRUST ATTORNEY LAS VEGAS | PUT THE HOUSE IN THE TRUST?
TRUST ATTORNEY LAS VEGAS | PUT THE HOUSE IN THE TRUST?
Welcome to the trusted podcast. I’m your host, Blake Johnson. Uh, today we are going to be talking about, um, your house and how you can have that passed to, uh, the person that you want to without having to go through probate. And a question again, a lot of blade do I need to have, if I own a house, does it really need to go into a trust? Um, and then does it provide me any asset protection if I do that trust? Well, if you’ve listened to any of our other episodes before, you know the answer, answer that last question is it depends what kind of trust that you create. So there’s two types of trust Trust Attorney Las Vegas, a living or a revocable trust. And the second type is a irrevocable trust living or revokable trust means that you can change it at any time and that does not provide you with any asset protection in irrevocable, irrevocable trust can provide you with some asset protection if it’s set up correctly.
And it depends on who the beneficiaries are, you know, what the state’s laws are on that and who the trustees are. So a lot of things that have boxes that have to be checked in order for that irrevocable trust to give you protection. Let’s go back to, um, you know, if I own a house, do it, does it need to go into a trust? Uh, there’s a couple of ways that a house can pass to an AER without having to go through probate court. The first is that, um, if it’s own joint tenants with right of survivorship, then when the first person dies, the house does go to the surviving, um, owner without having to go through probate court. All they have to do is file a death certificate and affidavit terminating the joint tenancy. When they do that, then they become the sole owner of the property and we don’t have to get the courts involved for anything.
The problem with that is when the second owner dies, then we do have to probate. So you’d have to continuously add a second owner. Uh, but then, um, you also have issues of gifting. You don’t get the step up in basis from a tax perspective. So it’s not the most ideal way to do it. But that’s, you know, if you’re husband and wife and you bought the house together, Trust Attorney Las Vegas yeah, at a minimum shirt, get the joint tenancy with the right of survivorship. That’s better than not doing anything. Um, gotta be very careful with the way things are worded cause there’s also tenants in common and if you are tenants in common than we would have to go through probate. Basically what it says is you have your 50% interest and it’s yours exclusively and we don’t have a joint tenancy. So you have to go through court to get that, um, your 50% interest transferred to the right person.
So make sure the wording’s correct when, when they title your house. Uh, the other way that you can pass it without having to go through probate court and without using a trust is a deed upon death. And what this is, is something you filed with the court. It has to be filed before you pass away. So it’s not like, um, you know, if you quit, claim your house, uh, you signed the deed on your death bed and then they go and recorded the day after you die, that would be OK. Uh, because you signed the deed and that it’s, it’s the transfer is complete upon signing it. But the notice to third parties is complete. When you record the deed. The deed upon death, uh, is different. It says it has to be re not only signed but recorded prior to the death of the individual, uh, who owns the property and what the basically says is upon my death, I want my house to go to this person or these two people or, uh, whoever you want it to be.
And you could change that. You know, if you change your mind, you file a new deed upon death and whatever the most recent one is, that becomes the governing document there. The problem with that is as there’s no record of that, so unless you tell that individual that upon your death, they have the deed upon death, uh, there’s no real way to, to know if that’s done. Trust Attorney Las Vegas So you may go through the probate process only to find out later that there is a deed upon death. Uh, so, uh, you know, it’s very important if you’re going to do things that way that you do notify the individuals so they know what they need to do, which is sending a copy of the death certificate and execute their right to that deed upon death. Uh, not still not the most ideal way to do it because it doesn’t pride for a condition contingency.
So if your named beneficiary dies before you at the scene or at the same time as you, then we have to go through probate now for that house because the, there is no air to take that house. So really that call comes back to what’s the best way to transfer an asset upon death. It really is through a trust where that’s living or uh, irrevocable. The trust, uh, provides a way. So, um, you know, it passes, uh, without having to go through court all that the individuals have to file who, who is the trustee Trust Attorney Las Vegas. So the person who managed the assets of the trust, the successor trustee that’s named, they take over and they file an affidavit of successor with the successor trustee with the County, basically says that the original trustee died, that they were named in the document as the successor trustee and that they accept the role as trustee.
And so they need to transfer title Vernon to their name. And so it transfers over to Bob Smith as trustee of the Smith living trust. And then he has access to it. He could sell the property, he signs as the owner of it and uh, you know, goes on their way. So, you know, we’re talking about a two week turnaround just because you have to get a death certificate, but then they have access to everything and the ownership never changes, which is also nice. You don’t have to worry about, um, you know, getting a different person on there. As far as an actual owner, the trust is still the owner regardless of who the trustee is. Um, so that’s, that’s the ideal way, uh, to have it passed to, um, you know, X person. Because when you set up the trust, you put the ownership of it in the trust and then it’s done and it provides for all the contingencies.
So if, uh, one of your beneficiaries dies, the trust already lays out who that next person is. And we still don’t, we don’t ever have the risk of having to go through probate court, um, because we always have the backup beneficiaries listed. So, uh, that’s the, that’s answers the question. If you own a house, does it need to go into a trust? I do. Wanna talk about one more thing regarding your house and that’s the homestead exemption. Uh, most States have a homestead exemption. And what that, uh, most people think, Trust Attorney Las Vegas Oh, if I put that on my house, then the house is protected that nobody can ever, you know, assume you’re get the equity in there. And that’s not completely true. So the mortgage company, because they have a right secured right through the property, they will always be able to foreclose and get that property if you stop paying them.
So that’s number one. Number two is, uh, a homestead does not protect you from getting sued. It for, it protects you from getting a, your house foreclosed on from outside creditors that don’t have a secured interest in the property. And what I mean by that is the public policy is we don’t want people forced out on the street because they didn’t pay their credit card bill or their car note or you know, something like that. So what they can do is they can attach to the property and they get a permanent lien against it if there’s a homestead, but they can’t foreclose and kick you out on the street. But when you ever do decide to sell that property, that’s when they get paid out of the equity there. So that’s, that’s what a homestead means. There’s a lot of misconceptions there. Um, it is good to have because then you are not forced down the street and it’s really simple.
You just go down to the County recorder and say, I want to file a homestead on my property. Um, you know, you have your address, they should be able to look you up. Ideally you want to know what your parcel number is and that’s on your tax statement that you get every year or every quarter from the County. And then they can look it up. You’ve, you fill out the paperwork saying, I want to know exercise the homestead Trust Attorney Las Vegas, sign it, and you’ll need all the owners to sign that homestead. And then you file it with the County and you know, whatever the recording fee is, that’s what you’ll pay. You know, typically anywhere from 20 to 50 bucks is what you’ll see. So that’s houses, that’s how, how you can transfer and without having to go through probate court and also what it looks like to have it in a trust. Thanks for listening and we look forward to having you join us next time.