Q: What are the advantages of putting my home in a trust costing $3500. or a joint tenancy. We are leaving =ly to 3 sons.
The fee for trusts is not set by law and estate planning attorneys will set their own rates, so a trust may cost more or less than the figure you quoted, depending on the circumstances and what else is involved. (My firm, for example, at time of this post prepares comprehensive revocable trust packages in Maryland for less than $2,000 including wills, advance directives, powers of attorney and a deed for a principal residence, but you can inquire with any attorney of your choosing).
Revocable trusts give significantly more control than a deed - they can, for example, protect assets in blended family situations so that the wishes of both husband and wife are assured after one or the other die. Trusts can also help in situations with younger beneficiaries, where there are many beneficiaries or where some circumstances suggest some of the beneficiaries might not be able to effectively handle the assets on their own. In addition, they can allow for a single person (the trustee) to make decisions and sell the property without all the beneficiaries agreeing on every detail (for example, what realtor to hire, what will they list for, will they first fix the roof or sell as-is, etc.)
Joint tenancy is usually not a good option because it immediately opens the property to the claims of a child (or other beneficiary)'s creditors. For example, if a child was involved in a car accident that resulted in a judgment against them, that claim would attach to the house. Additionally, if the original owners want to sell the house, they cannot do so without the other joint tenants' consent. Finally, there can be unexpected capital gains tax complications when someone gives away property during their lifetime through a joint tenancy deed.
There is a third option - a life estate deed (which would typically cost several hundred not several thousand). If there is not a blended family (children from different marriages), special needs or other reason to protect in a trust, a life estate deed can retain full ownership during the original owner's lifetime and instantly pass to the named beneficiaries when the original owner(s) die.
I encourage you to sit down with a qualified estate planner to discuss these options. While not legal advice, I hope that the above helps.
Nina Whitehurst agrees with this answer
A: Everything my colleague Ms. Laumann recited about the advantages of trusts is correct. I would also add that trusts avoid probate, which is a time-consuming, frustrating, public and expensive court-administered process. For some clients, that is the MAIN reason for creating a trust-centered estate plan versus a will-centered estate plan.
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