Placing your house in a revocable trust usually does not change your day-to-day ownership. You can still live in the home, pay the mortgage, refinance it if needed, and sell the property just as you normally would. The key difference is what happens later. When the property is held in a trust, it can pass to your beneficiaries directly, without going through probate, helping your family avoid unnecessary delays, costs, and court involvement.
Nine times out of 10, if a client comes in and they own a house, we’re going to recommend that they have a trust in place.
5 Benefits of Putting Your House in a Trust
Placing a home into a revocable trust provides several important advantages for both the homeowner and their heirs. For many homeowners, this simple step can make a significant difference in how property is managed and transferred in the future.
The following are some of the key benefits of deeding your home into a trust instead of holding it in your personal name:
#1 - A Trust Avoids Probate
When you place your home in a revocable trust, it can pass to your beneficiaries without going through probate. A revocable trust is among the most common ways to avoid probate, allowing your heirs to manage or transfer the property without long delays.
If a home remains titled in your personal name, it may tie the property up in probate for as long as nine months to two years. During that time, decisions about the property are often limited and may require court approval, making it difficult for your family to:
- Sell the house
- Rent the house
- Refinance the house
- Make improvements or renovations
You don’t have to have a trust in every state in which you have property. A Revocable Trust can own property in multiple states and ensure that you can avoid probate in each of those states.
#2 - A Trust Simplifies the Inheritance Process
When your home is held in a revocable trust, you can clearly define how the property will be handled or who will receive it after your death. Instead of relying on default state laws or probate court decisions, your trust’s instructions control what happens.
For example, you can specify which beneficiary receives the home, whether the property should be sold, or whether a loved one has the right to live in the home for a period of time. Because the property belongs to the trust, your successor trustee can carry out those instructions directly.
#3 - A Trust Allows a Successor Trustee to Act During Incapacity
Another important benefit of putting your house in a trust is that your successor trustee can step into their role and manage the property if you become incapacitated or die. Because the home has already been placed in the trust, the trustee has the authority to act without waiting for a court appointment.
This authority allows the trustee to immediately control and maintain the property. For example, they have legal authority to do the following:
- Pay property taxes.
- Keep utilities running.
- Maintain insurance coverage.
- Arrange repairs or maintenance.
- Manage mortgage payments.
#4 - A Trust Allows You to Keep Full Control of Your Home
Placing your house in a revocable trust does not mean giving up control. Because the trust is revocable, you retain full control of the property and can manage it as you always have.
You can still do the following:
- Sell the house.
- Buy a new home.
- Rent the property.
- Refinance the mortgage.
- Make improvements or renovations.
If you decide tomorrow that you want to sell everything and move somewhere new, the trust does not prevent you from doing that.
#5 - A Trust Preserves the Stepped-Up Basis for Tax Purposes
Another important benefit of placing your home in a revocable trust is that your heirs can still receive a step-up in basis for capital gains taxation purposes when they inherit the property. A stepped-up basis means the tax value of the home is adjusted to its fair market value at the time of your death.
For example, if you purchased a home for $200,000 and it is worth $600,000 when your heirs inherit it, the basis is typically adjusted to $600,000. If the property is later sold near that value, your heirs may owe little or no capital gains tax.
Why a Will Alone Is Not Enough to Avoid Probate
Many homeowners assume that a will makes it easy for their home to transfer to their heirs. In reality, a will still requires the estate to go through probate before property can be distributed.
One of the main reasons to avoid probate is that the process can be slow, costly, and public. Probate may take months or even years, and court oversight can lead to legal fees and delays for your family.
A revocable trust works differently because the property is already titled in the trust and does not need to pass through probate. The comparison below shows how wills and trusts handle real estate differently.
Will vs. Revocable Trust: What Happens to Your Home
| Will | Revocable Trust | |
|---|---|---|
| Home Goes Through Probate | Yes | No |
| Cost | Probate costs may reach 3% to 5% of the estate value | Typically, only the initial trust setup cost |
| Speed of Transfer | Often 9 - 24 months | Often immediate administration |
| Decision Maker | The probate court oversees decisions | Successor trustee follows the trust instructions |
| Privacy | Probate records are public | Trust administration is private |
| Court Involvement | Court supervision required | Usually, no court involvement |
| Attorneys Required | A probate attorney is often required | An attorney is typically not required for administration |
Frequently Asked Questions
Homeowners often have several questions about what happens after a property is placed in a trust. The answers below address some of the most common concerns for clients considering placing their house in a trust.
Do You Need a Separate Trust for Every Property You Own?
No, most people only need a single revocable trust, which can hold multiple assets, including homes and property located in different states.
How Does a Trust Affect Your Ability to Sell My Home?
Because the trust is revocable and you control it as the trustee, you can sell the property just as you normally would. You simply sign the closing documents as the trustee of the trust.
How Do You Properly Deed Your New Home into a Trust?
When purchasing a new property, you can ask the title company or lender to title the property directly in the name of your trust at closing. If the property is initially titled in your name, you can transfer it to the trust shortly thereafter with a new deed.
How Does Putting a Home in a Trust Affect Your Mortgage and Taxes?
Transferring a home into a revocable trust usually does not change your mortgage payments, property taxes, or homestead exemption because you still control the property.
Does Putting Home in a Trust Protect That Asset from Title Theft?
A trust can add an extra administrative step because a person transferring property typically must demonstrate authority to act on behalf of the trust. However, it is not a guaranteed protection against title fraud.
Should You Put Your Personal Residence in an LLC Instead of a Trust?
In most cases, a personal residence is better placed in a revocable trust rather than an LLC. An LLC is typically used for investment or rental properties and may affect homestead protections or tax treatment if used for a primary residence.
At Evans & Davis, our estate planning attorneys help clients create a revocable trust and properly deed their home into it so their estate plan works as intended. When clients execute their plan, they leave with a binder containing their trust, will, and deed documents, along with clear funding instructions explaining exactly how to title new assets, including real estate, into the trust. Therefore, you will never be left without guidance.
Call 866-708-2335 or contact us online to speak with an Evans & Davis estate planning attorney about putting your house in a trust.
