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Revocable living trusts help protect homes

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POSTED: January 5, 2014 10:32 a.m.

The last couple of years have shown us just how tentative home ownership can be.
Who of us does not know someone who had to refinance, sell their home or, worse, lost their home to foreclosure? Losing a home is more than just a negative mark on your credit rating. Our homes contain our memories, promise a safe place to live in our retirement and, in Savannah, tie us to our history.
Knowing what we know now, wouldn’t you want to protect your family home for the next generation if you could?
Well, you can.
A revocable, or “living,” trust is a powerful tool that is commonly used for this purpose. You can add your assets, including your home, to the trust and maintain use of these assets during your lifetime. The revocable trust gives you and your home a number of protections during your lifetime and creates provisions for when you pass away.
With a revocable trust, you can make changes at any point during your life, making it a flexible estate planning tool. This flexibility can accommodate the sale or purchase of a home or additional investment properties.
You also have a lot of flexibility in deciding what happens to the home you’ve treasured after you pass. For example, you may wish to leave the property directly to a certain heir or group of heirs who then will be responsible for the costs associated with keeping and running the home.
On the other hand, you may choose to incorporate funding into the trust for the upkeep of the home. Some people even choose to leave their home as a legacy to a certain organization for various purposes or to a group of family members to use as a vacation residence.
Another option that Savannah estate attorneys see in practice is when a specific person is given the option to buy the home. If this person declines, the next potential family member is given the option. The grantor can name as many people as he or she likes or can choose to have the home sold and the proceeds given to the charity of his or her choice.
When a family member exercises this option, however, it is typical for the home to be purchased at fair market value.
Once you die, the trust becomes unchangeable (“irrevocable”), ensuring that your wishes are carried out. The establishment of a trust trumps the Chatham County probate process, saving time and money and eliminating the possibility of a court dispute among family members. It also ensures that you can privately transfer your property as you see fit.
Revocable trusts are relatively easy to set up with an estate attorney in Savannah. The cost varies, of course, but putting together all of the legal documentation usually costs less than a few thousand dollars and saves many times that much for the estate.
A good estate attorney in Savannah will be able to help you create a revocable trust that gives you access to your home throughout your lifetime while setting up what will happen to it after your death. By doing so, you may be able to avoid certain taxes that would apply, not to mention avoiding the significant costs associated with probate in Georgia.

Barid of Richmond Hill and Smith are co-founders of Savannah-based Smith Barid LLC, which specializes in estate planning and special-needs planning.

 

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