Why is Transferring Your House to Your Trust Important in Yorkville?

 Posted on December 19, 2022 in Estate Planning

Transferring your house to your Revocable Living Trust is a crucial step to avoid probate court. Preparing an estate plan is a crucial step to avoid court procedures. A Quit Claim Deed in Trust is the type of quit claim deed used to transfer your house into your revocable living trust. A Revocable Living Trust may also be known as a “Living Trust.” A Quit Claim Deed in Trust conveys real estate into your trust’s name. 

Unlike a warranty deed, a quit claim deed transfer does not guarantee that the title being transferred is without liens or problems. A Quit Claim Deed transfers the exact title and interest a person has at the time of transfer. 

The main benefit of a Quit Claim Deed in Trust is re-titling your house into your living trust’s name. When a family transfers real estate into the living trust’s name the living trust owns the house. Re-titling the house into the living trust's name ensures that the trust agreement will be followed upon death or incapacity.

Trust Agreement 

A trust agreement is a written agreement, which is created by the creators of the Living Trust. The creators of a Living Trust are called “grantors” or “trustors.” The trust agreement outlines your family's wishes and how you want your house distributed upon your death or incapacity. When a person(s) creates a trust, they appoint a trustee (or co-trustee) to administer their trust.

The creator of the trust serves as the trustee. The trustee is responsible for administering the trust and following the guidelines described in the trust agreement. The guidelines in the trust agreement were created by the creators of the trust. The trust agreement describes one’s wishes and how they want to distribute their property in the order of their preferences upon their death. The trust agreement anticipates a strategy how to overcome common assumptions such as failure to consider that children may predecease a parent. Or perhaps an adult child or minor child may develop a disability and may require government financial assistance. Planning for anticipated possibilities is a key role of a Yorkville Estate Planning Lawyer. In summary, the trust agreement is a probate avoidance strategy designed to create a smooth transfer of real estate upon death.

Importance of Beneficiary Designations

Funding your living trust is important to avoid probate court. Examples of assets that should have beneficiary designations include bank and savings accounts, real estate, life insurance, and retirement accounts. The basis of estate planning and a living trust assists to avoid probate. 

Probate is the court, which determines who shall be the rightful owner of your assets and appoints an executor to administer your estate. One of the multiple weaknesses of the probate court is the time and cost of attorney's fees and costs to administer one's estate. An estate is a person's assets that exist upon death. 

Beneficiary designations help avoid probate court if implemented the correct way. Bank accounts are highly recommended to be placed into the living trust’s name. Some people resist re-titling their bank and savings accounts because several automatic transactions automatically debit their accounts. At a minimum, the living trust should be the beneficiary of your bank and savings accounts.

The value of transferring assets into your trust’s name is avoidance of court procedures. Probate court can be costly and leads to estate disputes. One of the major goals of estate planning is the elimination of family disputes. Your Yorkville Estate Planning Lawyer can assist you with establishing a realistic estate plan. A realistic estate plan increases the likelihood of avoiding probate court and trust disputes.  

Placing Your Home into Trust Assists in Avoid Probate Court

The Garn-St. Germain Depository Institutions Act of 1982 protects families from the “due on sales” clause which appears in your mortgage contract. A Due-on-Sale Clause requires a loan to be fully paid upon the transfer of real estate out of the mortgage holder’s name. A family creating a living trust retains control over their property and has the power to refinance real estate and sell their real estate property. The trust agreement should outline broad powers, which the trustee may exercise at their discretion such as refinancing a property or selling real estate. A Quit Claim Deed in Trust is a transfer, which conveys a person’s real estate interest into the name of the trustee of their living trust. 

The Garn-St. Germain Act Exempts Certain Real Estate Transfers

Transfers to the living trust are protected from triggering a due-on-sale clause. The main benefit of transferring your primary residence into your living trust is probate avoidance. Upon your death or incapacity, your house should be transferred immediately to the loved ones of your choice. Transferring a house through a will may trigger the probate process. Probate is the court process, which is required for select real estate transfers.

If you forget to transfer your primary residence into your living trust, the pour-over will is your safety net. A pour-over will is a common legal document, which is part of one's living trust package.  The pour-over will is a safety net for families that fail to finalize the transferring of their real estate (or assets) into their living trust’s name. A pour oversimplifies the probate process by eliminating the costs of surety bonds and distributing real estate. The probate process still takes around one year for simple probate matters without any estate conflicts.

Contact your Plano IL Estate Planning Lawyer For Estate Planning and Real Estate Guidance

Peace of Mind Asset Protection, LLC can assist you with the preparation of your quit claim deed in trust. Our attorneys and staff educate you about estate planning and help you avoid family disputes. A Living Trust is a powerful tool to avoid probate court.