Tuesday, August 7, 2007

Real Estate 101

What is a Revocable Living Trust?

When you buy a house, probably the last thing you want to think about is death, but it is important to think about what might happen should you pass. Most people think having a will is enough, but you should also consider a revocable living trust when it comes to your home, because it is such a huge asset.

If you have a will when you die, your estate and your heirs will have to go through the probate process, in which the courts verify your will and allocate your assets, including your home. This can be a very lengthy, complicated & expensive process, though there are ways to write your will that streamline the process, making it easier for your family.

The most efficient way to transfer your home and assets is through the revocable living trust, which does not involve the courts after your death. A revocable living trust is a property and estate management plan written up by a lawyer that appoints a trustee to manage the estate. When you set up the trust, you place the home and other valuable assets in the trust. This means that the deed to the home is actually placed with the trust and not you as an individual. You act as the trustee, and name someone to be the trustee in the event of your death or other incapacity. And, it is still advisable to have a will for other issues that the trust will not cover.

While having a revocable living trust can be complicated, it will provide much simplicity down the road when it is needed most. If you would like more information on revocable living trusts, let me know. I can be reached at MSmartt@jps.net or 510-547-5970 x57.

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