Tag: revocable trust

Bequeathing a Home to a Loved One

Posted by Galeet Levy on

I am a 74 year-old retired woman living in a completely paid off condo. I hold title to my condo in my name only. I want to know more about leaving my leaving my condo to my partner and daughter when I die. I am asking about adding my partner of 20 years and my daughter to the home title in order to avoid probate. What is the easiest way to do that? Can I leave it in Joint Tenancy so the condo will pass both survivors (partner and daughter)? My parents had held title with both my brother and me and I want to know if there is a problem with this.

YES. There is a problem with this.   Here are a couple issues that could arise after you die. What if your daughter wants to sell this condo to raise cash, but your partner disagrees and doesn’t want to move. What if your daughter would like to collect rent and your partner refuses? What if your partner wants to remodel the home as she ages but your daughter wont share the costs? Would one survivor have to buy the other out? It also brings up questions of property transfer taxes.
The best solution is a revocable living trust! A trust can leave instructions (your wishes) for how to handle this situation. It may say that your partner can stay in the condo indefinitely but must pay a rent to the daughter. The trust can even establish what is a fair rent to pay. The trust could also say that the condo should be sold and the profit divided evenly.

Whatever you decide a revocable living trust can give the proper instructions on what to do. Both your partner and your daughter will understand these were your intentions and wishes. It may also prevent fighting and resentment and animosity between your partner and your daughter. With a Trust you also have less gift tax problems to deal with. The property will transfer to either survivor, depending on your instructions. You won’t face property tax reassessment. There are many issues that are never even thought of when it comes to bequeathing a property.
If you are interested in talking to an estate attorney to help you with bequeathing a home to loved ones please give our office a call 818.887.9401.

Can a Creditor take Assets Held In Your Revocable Living Trust?

Posted by Galeet Levy on

The answer is YES. Yes they can.

A revocable living trust does not provide protection from creditors, lawsuits or divorce.

There are many advantages to a Revocable Living Trust, but protection of assets isn’t one of them.

A creditor or judgment holder or even an ex-spouse can take property owned by your revocable living trust because the trust is revocable. It is not necessarily permanent, you can change the terms of a revocable living trust agreement at any time. You can put assets into trust and take them out. A creditor, judgment holder or divorce court can force you to take property out of trust to pay off judgments or other types of debt and obligations.

There are other options for asset protection. Here are two suggestions:

  1. Setting up a limited liability company (LLC) or limited partnership and transferring the ownership of assets into these legal entities. It is a good idea to contact an attorney who knows about this, and they can help you set up one of these corporations.
  2. Creating one or more irrevocable trusts – these do provide asset protection. But you are essentially giving the assets away to this trust. Be very careful when choosing his options, it is always best to consult an estate planning attorney who knows about Irrevocable Trusts before doing this.

Even though a revocable trust does not offer asset protection and cannot protect your property from the claims of creditors or a divorcing spouse, there are still options. Speak with a knowledgeable attorney about the steps you can take to create a comprehensive asset protection plan that goes along with your estate plan.

Call our offices for any questions 818.887.9401