When you own multiple pieces of real property, your estate could face numerous complications. You could trigger estate taxes if the total value of those properties is millions of dollars. There could be disputes among your beneficiaries about your last wishes. Creditors might even try to come after your properties as you age or after you die.
Trusts can be powerful tools for those who want to avoid probate complications and estate taxes. If you want to create a trust to own and manage your multiple pieces of real estate, what will the process involve?
Choose a trust structure and a trustee
One of the first and most important steps in creating a trust to protect and manage your real estate assets is deciding what kind of trust you need. Frequently, the big decision is whether to create a revocable or irrevocable trust, and your current circumstances will influence which structure is better in your case.
You also need to think about who will serve as trustee. You could choose just one person. You could also name several people to work as co-trustees and provide a sort of balance and checks system to prevent abuses. If you want the trust to persist for multiple generations, you may want to hire a corporate trustee or professional fiduciary.
Draft and execute deeds for the relevant properties
Once you have the basic structure of the trust established, you need to move the individual properties into it as a way of funding the trust. You and any other current owners will have to execute deeds for each of the individual properties transferring ownership to the trust.
In some cases, you may need to pursue quiet title proceedings prior to executing a new deed. You met have to notify tax authorities about the change, as it may affect how much they assessed against the property.
Practical considerations are only part of the process
You also need to create a plan for the management of the properties and think about what you want to have happen to them in the long term. The trust could allow your family members residency before liquidating the homes later and distributing the proceeds to charity or surviving descendants.
Careful estate planning can help those with multiple real estate holdings protect their interests and their legacy as they age and after they die.