If you’re a homeowner in Boca Raton, Florida, you may have heard about the benefits of placing your house in a Trust. Avoiding Probate, maintaining privacy and ensuring a smooth transfer to your Beneficiaries are just a few of the reasons why many people choose this option for their Estate Planning. However, while a Trust offers many advantages, it’s not the right solution for everyone. Factors like upfront costs, complexity and potential challenges with refinancing can make some homeowners think twice.
In this blog, we’ll explain how to put your home in a Trust, discuss the potential benefits and explore why you might choose not to go down this path. Whether you’re seeking to protect your assets or simplify the future for your family, understanding both the pros and cons will help you make an informed decision.
Understanding Trusts: What They Are and How They Work
Before going over the specifics of putting your Boca Raton house in a Trust, it’s essential to understand what a Trust is and how it functions. A Trust is a legal arrangement where you (the Grantor) transfer ownership of your property to a Trustee, who manages it for the benefit of your chosen Beneficiaries.
There are two main types of trusts:
- Revocable Living Trusts: These can be modified or terminated during your lifetime, allowing you to retain full control over the property while you’re alive
- Irrevocable Trusts: Once established, these cannot be easily changed or revoked
For most homeowners in Boca Raton, a Revocable Living Trust is the most common choice when placing a house in Trust.
Irrevocable Trusts are often used for Medicaid Planning or Asset Protection. They offer protection from creditors and can help shield assets from Medicaid Estate Recovery. However, they may not offer the flexibility most homeowners desire, as you typically give up control over the assets placed in the Trust. It’s also important to consider the 5-year Medicaid look-back period when transferring assets into an Irrevocable Trust.
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Why Put Your House in a Trust?
1. Avoiding Probate
- Reason: Probate can be a time-consuming and costly legal process, and in Florida, it may involve court proceedings that could delay the transfer of your property.
- Benefit: By putting your home in a Trust, you ensure that it passes directly to your Beneficiaries without going through Probate, saving time, money and stress.
2. Maintaining Control During Incapacity
- Reason: If you become incapacitated due to illness or age, a Trust allows someone you trust to manage your property.
- Benefit: A Successor Trustee can step in and manage your home without needing a court-appointed Guardianship, ensuring continuity and protecting your assets.
3. Privacy
- Reason: Wills are public documents once probated, which means anyone can see your Estate plans.
- Benefit: Trusts remain private, so by placing your home in a Trust, your family can avoid public disclosure of their inheritance and your financial matters.
4. Efficient Transfer to Beneficiaries
- Reason: A Trust lets you dictate the terms of how and when your home is passed on to your Beneficiaries.
- Benefit: You can add specific instructions or conditions, ensuring the property is managed according to your wishes, unlike a standard Will, which may provide less flexibility.
Myths and Facts About Placing Your House in a Trust
When considering placing your house in a Trust, it’s easy to come across conflicting or unclear information. Below are some common misconceptions about placing your home in a Trust and the truth behind them.
A Trust Will Protect My Assets from Creditors
- Myth: Many people believe that by placing their home in a Revocable Living Trust, their assets will be protected from creditors.
- Fact: A Revocable Living Trust does not offer creditor protection because the Grantor retains control over the assets in the Trust. This means creditors can still access those assets. If creditor protection is a goal, an Irrevocable Trust may be more suitable, but this comes with its own limitations, such as giving up control of the assets placed in the Trust.
Once My House Is in a Trust, I Can’t Sell It
- Myth: Some people believe that once they transfer their home into a Trust, they lose control over it, meaning they can no longer sell or refinance the property.
- Fact: With a Revocable Living Trust, you retain full control over the property. You can sell, rent or refinance the house as long as you’re alive and mentally competent. You would simply sign the documents as the Trustee of the Trust rather than as an individual homeowner.
Putting My House in a Trust Will Complicate Taxes
- Myth: People often assume that placing their home in a Trust will complicate their tax situation or change the way property taxes are assessed.
- Fact: For most homeowners, placing a house in a Revocable Living trust does not affect taxes. The property will still be taxed in the same manner and your homestead exemption will remain in place as long as the Trust is structured properly. There is no additional income tax filing required for a Revocable Trust during your lifetime.
A Trust Is Only Necessary for Large Estates
- Myth: Some believe that Trusts are only beneficial for people with large Estates or significant wealth.
- Fact: While Trusts can certainly be useful for large Estates, even smaller Estates can benefit from avoiding Probate and ensuring a smooth transition of assets. In Florida, Probate costs and delays can apply to estates of all sizes, so a Trust can still save time and money, regardless of the Estate’s size.
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Steps to Put Your Boca Raton Home in a Trust
Now that you understand the benefits, let’s break down the steps for putting your home into a Trust.
1. Consult with Boca Raton Trust Attorneys
It’s highly recommended to work with experienced Boca Raton Trust attorneys to ensure that your Trust is set up correctly. A Trust must be properly drafted to avoid future legal issues and preserve any protections, like the Florida homestead exemption.
2. Choose Your Trustee
You’ll need to select a Trustee to manage the Trust. Most homeowners initially name themselves as the Trustee, with a Successor Trustee taking over if they become incapacitated or pass away. A Successor Trustee can be a family member, trusted friend or professional fiduciary.
3. Determine Your Beneficiaries
Decide who will inherit your house after your death. You can name individuals, charities or institutions as Beneficiaries. You may also choose to set specific terms or conditions for how the property is transferred or managed.
4. Draft the Trust Document
Your Trust attorney in Florida will draft the legal Trust document, which outlines the details of the Trust, such as how your property will be handled, who the Beneficiaries are and who the Trustee will be. Make sure this document aligns with your overall Estate Plan.
5. Sign and Notarize the Trust
In Florida, the Trust document must be signed and notarized to be legally valid. Although a Revocable Living Trust does not require witnesses, it’s essential to notarize the Trust to ensure its enforceability.
6. Transfer the Property into the Trust
Once the Trust is created, you must transfer your home into it. This is called “funding the Trust.” You’ll need to execute a new deed (typically a quitclaim deed or warranty deed) to transfer ownership of your house from your name to the Trust’s name. This process is called re-titling the property. Once the deed is prepared, it must be recorded with the County Clerk & Comptroller’s office.
7. Update Related Documents
Ensure your other Estate Planning documents, such as your will, align with your Trust. For instance, you may want to create a Pour-Over Will that ensures any assets not initially placed in the Trust will be transferred to it upon your death.
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Key Factors to Consider When Placing Your Home in a Trust
Homestead Exemption
Florida’s homestead exemption offers significant property tax and creditor protections. Transferring your home into a Revocable Trust generally does not affect your homestead exemption, but the Trust must be properly structured to preserve it. The Trust should be written to ensure the Grantor retains beneficial use and full equitable ownership of the property, which is required for the homestead exemption to remain intact.
Tip: Always consult with your Trust attorney in Florida to ensure the Trust preserves your homestead exemption, which can help reduce property taxes and protect against certain creditors.
Mortgage and Lender Notification
Federal law (specifically the Garn-St. Germain Depository Institutions Act) protects against a due-on-sale clause being triggered when you transfer your home into a Revocable Living Trust. However, it’s essential to notify your mortgage lender of the transfer. Some lenders may require additional documentation or a review of the Trust, but they cannot call the loan due just because of the transfer.
Property Insurance
After transferring your home into the Trust, update your homeowners insurance to reflect the Trust as the owner. This ensures that the property remains properly insured and avoids disputes during claims.
Refinancing Complications
Some lenders may hesitate to refinance a property held in Trust. In such cases, you may need to temporarily remove the property from the Trust, complete the refinance and then transfer it back into the Trust. However, not all lenders have the same requirements, so it’s worth discussing the trust arrangement with your lender before assuming this step is necessary.
Why You Might Not Want to Put Your House in a Trust
While placing your home in a Trust offers many advantages, it’s not always the right solution for everyone.
Upfront Costs
Establishing a Trust can involve legal fees, such as attorney’s fees for drafting the Trust and recording costs associated with transferring the property. These costs can vary depending on the complexity of your Estate and the type of deed used to transfer the property.
Complexity
Trusts require more ongoing management than a simple Will. You’ll need to update the Trust as your circumstances change and ensure that all assets (not just your home) are properly transferred into the Trust.
Refinancing Challenges
Refinancing a property held in Trust can be more complicated. Some lenders may require that you temporarily remove the property from the Trust for refinancing, which can add extra steps and costs.
As you can see, putting your house in a Trust in Boca Raton, Florida, can offer numerous benefits, from avoiding Probate to ensuring privacy and simplifying the transfer of property to your Beneficiaries. However, it’s important to carefully consider the costs, complexity and potential challenges that come with maintaining a Trust.
By working with an experienced Estate Planning attorney, you can create a Trust that protects your home and ensures your wishes are carried out efficiently, offering peace of mind for you and your loved ones.
Take Action: Secure Your Boca Raton Home’s Future with a Trust
You’ve learned about the benefits and process of putting your Boca Raton house in a Trust. Now it’s time to take the next step in securing your property’s future. Creating a Trust involves important legal decisions that can significantly impact your Estate Plan.
The Siegel Law Group, P.A. is here to guide you through this process. With over 100 years of combined experience in Estate Planning, Probate and Trust Administration, our attorneys understand the intricacies of Florida property law and can help you determine if a Trust is the right choice for your situation.
Don’t leave your property’s future to chance. Take control of your legacy and protect your assets today. Call The Siegel Law Group, P.A. at to schedule your confidential complimentary consultation. If you prefer, fill out our online form to arrange a meeting with one of our knowledgeable Boca Raton, Florida Estate Planning lawyers.
During your consultation, we’ll listen to your concerns, answer your questions, and help you understand how Trusts fit into a comprehensive Estate Plan tailored to your unique needs. Remember, proactive planning provides peace of mind for you and clarity for your loved ones.
Your Boca Raton home is more than just property – it’s a part of your legacy. Let’s work together to protect it. Contact The Siegel Law Group, P.A. today and take the first step towards putting your house in a Trust.
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The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.
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