Should Your Home Be in a Living Trust?

For many California homeowners, their home is the largest asset they will ever own. Yet estate planning is one of those subjects people tend to put off because it feels complicated, uncomfortable, or like something they will have plenty of time to handle later.

After helping families sell longtime and childhood homes following the death of a parent, I have seen how much easier the process can be when the homeowners planned ahead.

A living trust is not just for wealthy families. It may be an important tool for homeowners who want to make the eventual transfer of their property more organized and less stressful for the people they love.

What Is a Living Trust?

A revocable living trust is a legal arrangement created during your lifetime. Property and other assets can be transferred into the trust, while you generally continue managing and using those assets as you normally would.

Because the trust is revocable, it can usually be changed or canceled while the person who created it is still living and legally capable of making those decisions.

For a home to be included, the property generally must be properly transferred into the trust. Creating trust documents without updating the title to the property may leave the home outside the trust.

This is commonly called “funding the trust,” and it is an important step to review with a qualified estate-planning attorney.

Why Do Homeowners Consider a Living Trust?

One of the primary reasons is to help their loved ones avoid a full probate proceeding for property held in the trust.

Probate is the court-supervised legal process used to transfer property after an owner passes away. California Courts explains that a living trust may allow a home to pass to the intended beneficiaries without waiting for a probate judge to determine the transfer. The court also notes that even the fastest California probate cases typically take about nine months.

Avoiding probate may help a family:

• Reduce delays in managing or selling the property
• Maintain greater privacy than a public probate proceeding
• Clearly identify who is responsible for handling the home
• Reduce confusion among family members
• Follow the homeowner’s written instructions more efficiently

A successor trustee may be able to step in and manage the trust property when the original trustee dies or becomes unable to handle their affairs, depending on the terms of the trust.

A Will and a Living Trust Are Not the Same

Many homeowners believe that having a will means their property will automatically avoid probate.

A will states who should receive property, but assets controlled by the will may still need to go through probate. A properly created and funded living trust may allow assets held by the trust to be administered outside the full probate process.

Estate plans often include both a trust and a will because they serve different purposes.

Creating the Trust Is Only Part of the Process

One of the most important details is making sure the home is actually titled correctly.

Homeowners sometimes create a trust but never transfer their property into it. Others refinance, purchase another home, change ownership after a divorce, or make another title change without confirming that the property remains properly connected to their estate plan.

Consider checking:

• Is the property currently titled in the name of the trust?
• Are the successor trustees still the right people?
• Have there been marriages, divorces, deaths, births, or other family changes?
• Did you purchase or refinance a property after creating the trust?
• Does your estate plan still reflect your current wishes?

Estate planning is not necessarily something you complete once and never review again.

What Happens When the Family Decides to Sell?

When a home is held in a trust, the real estate agent, escrow officer, title company, and trustee must work together to confirm who has the authority to sign and sell the property.

Documents may include a certification of trust, the trust agreement or selected portions of it, the death certificate of a former trustee, and identification for the acting trustee. The exact requirements depend on the trust, title history, and circumstances of the sale.

Having documents organized before listing the property can help prevent delays once a buyer is found.

Start the Conversation Before It Becomes Urgent

I am not an attorney and cannot provide legal or tax advice. Every family’s situation is different, so homeowners should speak with a qualified California estate-planning attorney and tax professional before creating or changing a trust.

My role begins on the real estate side. When a trustee or family needs to prepare, price, market, and sell a property, I help them understand the steps involved and coordinate with their legal, escrow, and title professionals.

These sales often involve much more than putting a sign in the yard. They can include decades of belongings, deferred maintenance, family decisions, important paperwork, and plenty of emotion.

Planning ahead cannot remove every difficult moment, but it can give your family clearer instructions and one less complicated decision during an already challenging time.

If your family owns a home in Santa Clarita or the surrounding areas and you have questions about the real estate side of a future trust sale, I am always happy to be a resource.

Wendy Gundry
RE/MAX of Santa Clarita
Local Since 1981
Helping Families Buy and Sell Since 1996
Serving Your Real Estate Needs at a Higher Level
661-510-5370
WendyGundry.com