Use Living Trust Instead of Title Change For Inheritance
Added January 19, 2009 by Ilyce R. GlinkSummary: When you want to bequest property to someone it may be better to use a living trust instead of changing your home's title outright. If the person who you want to inherit your property is having marital strife, changing the title may cause the property to be considered part of the marital estate. In addition, if your heir lives outside of the U.S. that's another factor to consider in the decision about whether to use a living trust or change the title to the house.
Q: We want to change the title of our house to my niece who lives in Switzerland. She is separated from her husband. Would that be a problem?
A: You might want to rethink that plan. There's no reason to change the title over to your niece, particularly since she doesn't live in this country.
If your goal is to make sure she receives the property after your death, the easiest thing to do would be to set up a living trust, put the title to the property into the trust, and name her as the sole beneficiary. That way, you're leaving her an inheritance (which she receives at the current market value of the date of your death and not as a gift on which she -- or you -- may owe gift taxes). This also helps if she is getting separated from her spouse. You wouldn't want to give a gift that could possibly be construed as being part of the marital estate.
Please consult with an estate attorney or accountant before you do anything.
Jan. 19, 2009.
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Comments
michael says
I have a trust. My propery is listed in the trust, trust will be pased on to my daughter. I was told I need to transfer tilte of my property to my trust. So the trust owns the property. How do I trans fer the title over to my trust?