its main asset is a residence – Lake County Record-Bee

0

A residence can be held in additional trust for the benefit of one or more beneficiaries after the death of the owner. In California, a trust can hold title to real estate for up to 90 years or for a period that ends no later than 21 years after the death of a person who was alive when the owner of the building died. (when the trust is established). Let’s discuss when, why and how the so-called “House Trust” is used; so named because its main asset is a residence.

First, consider a second marriage with stepchildren, where the couple resides in a residence owned only by one spouse. The spouse owning the residence may want to allow the other (surviving) spouse to continue living in a residence, but ensure that the residence ultimately reverts to their own children. Second, consider the parents who wish to retain an important family residence after their death for the shared benefit of several children.

In the first scenario (second marriage), the spouse who owns the residence wants to protect his surviving spouse against eviction from his home. The spouse also wants to ensure that when the surviving spouse dies (or moves out), the residence ultimately benefits their children before the second marriage.

The House Trust controls the rights and duties of the beneficiary spouse and future beneficiaries. For example, the spouse may be allowed to use the residence for free for life, but be required to pay for insurance, taxes, maintenance, and utilities for the house while living in the house. The spouse may also be authorized to require the trustee to sell the residence and buy another residence with the proceeds of the sale; it would help if the spouse decides to downsize or move. Ultimately, when the surviving spouse dies or does not retain office, the trust ends and the remaining assets of the trust are distributed to the children of the spouse who owns the residence.

In the second scenario, parents want the benefits and costs associated with maintaining a residence to be shared among several children (and their families). Here the “House Trust” deals with how several beneficiaries share the use of the residence during the calendar year, the duties of the children (and their families) for the maintenance of the residence and for each other. the others, and the many costs of owning the house is divided.

The wording of the “House Trust” provisions varies according to each family situation and each objective. In all cases, it allows a trustee (or co-trustees) to manage the residence, apply the rules and avoid the distribution or outright sale of the residence on the death of the spouse who owns the property. residence. It also provides protection against the home’s creditors against most of the creditors’ claims related to the personal debts of the beneficiaries. Outright distribution could otherwise mean that the house is sold, is the subject of claims by a beneficiary’s own creditors, or is not being used in the manner intended.

The above is a limited and streamlined discussion of a larger, fact-based topic. It is not legal advice. Consult a lawyer for advice.

Dennis A. Fordham, lawyer, is a state bar certified specialist in estate planning, probate and trust law. His office is located at 870 S. Main St., Lakeport, California. You can reach him at [email protected] and 707-263-3235.


Source link

Leave A Reply

Your email address will not be published.