What happens when put your home into an Irrevocable Trust? - Podcast Episode 28
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- เผยแพร่เมื่อ 30 ก.ย. 2024
- In this episode we talk about what happens when you put your home into your Irrevocable Trust.
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Who pays property taxes and does the senior citizen exemption still apply
If one were to say....receive a sizeable windfall, I've been told that it's a good idea to own nothing, but control everything. Curious to know what you think of that statement. Thank you!
Klaus Schwab (nephew of Rothschilds) said…YOU WILL OWN NOTHING AND BE HAPPY.
One way to do this...would be to donate this to the trust (created by a Grantor)...which has you as the Trustee. But YOU cannot be the Grantor (a common...and TERRIBLE MISTAKE). Yes, a trust may be part of your waning to align yourself with that principle.
can i add a home to irrevocable trust that still has mortgage on it? can i instruct the trust to pay the mortgage with a checking account that is also in the trust?
I think that you could sell it to the trust..which--then--would be responsible for taxes and mortgage payments.
Good video. All my assets have beneficiaries or POD so only the house will cause probate. The current plan was to wait and have the surviving spouse put the home in a trust. The thought process was who knows if this is the “final” home or we will move so that would avoid extra steps. We assumed a revocable trust but I am trying to understand why the irrevocable trust is better. I get the Medicaid play but we have way too many other assets (house is less than 10% of net worth) for that to matter. Any other reasons to go irrevocable?
When an irrevocable trust sells an asset and realizes a gain, and those entire proceeds and gain is then distributed to the sole beneficiary before grantor death , does this mean that the irrevocable trusts must pay capital gains taxes. original purchase price $200k , value when trust created $400k , sold 2 years after trust formed for $400k , is the basis for capital gains $400k and therefor no capital gains tax?
The step up occurs from $200k to $400k because its in an irrevocable trust that the grantor no longer has control over. If the house sells for $0 more than the new basis $400k then there is $0 in capital gains.
But how do you know what was the value of the home when the trust was created?
@@gregbannish8423 Appraisal District records are tracked chronologically and historically. Additionally, they are incentivized to be on the high side in order to attain more tax revenue for they entities that they represent.
@@gregbannish8423 Testing testing 123. I typed out a whole response yesterday and its not showing up here now?
@@gregbannish8423Possibly through an assessment
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@@Nernst96 I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same. Is there any chance you could recommend who you work with?
COLLEEN ROSE MCCAFFERY is the advisor that oversees my portfolio. She's been able to gain some reputation and online recognition with over two decades in service, so it shouldn't be a hassle to find basic info.
this recommendation came at right time, very much appreciate it. curiously inputted her full name on my browser and found her site top search, no bs.. over 20 years of experience is certainly striking!
This country of hours has been selling fear non stop, WW2, the cold war, the Russians are coming, now the Chinese are coming, no one lives like this in rest of the world. Capitalism needs poverty, bigger population and fear. Lets put this aside, there is inflation because of excess money that was pumped into the system 2020 onwards, interest rates in this country had been 4-5% for over 70 years before the 2008 crisis. Jerome Powell the Fed Chair has been saying inflation was transitory since 2021, well those word caught up with him and if you were not paying attention you first clue was when Treasury Department was offering 3 month bonds of 9.50% for people like us to combat inflation, no one I know adjusted their portfolio, we have the same amount of saving and funds like you, I just moved into TBills and been getting 5.50% back religiously, also you dont pay state tax on Tbills. You can choose CDs which are around the same but you have fed and state tax on that. Inflation is already down, The Fed is looking to cut rates, its a booming stock market and we are destined for massive growth, unemployment is at 3.5% now for over 4 years, we have massive infrastructure bill, inflation act, has anyone read the massive massive opportunity that exists in the infrastructure bill ? We are short over 1 million workers, the population of this country grew the least amount in our history EVER in the last 10 years, Capitalism needs people, there had been no meaning minimum wage increase in over 20 years, all of these things add to what is happening, unfortunately we turned out back on these things and that is why we are here, this is America, I do remember the 70s, the hard recession of early 80s, 90s and 2008, every 10 years this country shoots itself in the foot, I have no idea why and people have Amnesia, they forgot how difficult things were but we are still here. www.census.gov/data/tables/time-series/dec/popchange-data-text.html
Can you create a trust and add the home on there even when you have a mortgage on it?
Yes
If the trust is irrevocable the mortgage may come due in full.
I think so...but it would STILL have an encumbrance on it.
Once the trust becomes irrevocable, does the beneficiaries need to vacate the main house. If not, then who will pay the annual municipality property tax, the trust or the beneficiaries/decendents?
No. Go to the county website and look up homestead. That's one of the way you can go
Why would the beneficiaries need to vacate the house? One of the benefits they'd enjoy is the "privilege" of residing in the house. . And, the Trustees would be paying these costs. Once you get the principle of the thing, this is NOT "rocket science!!!" BOTTOM LINE: you retain control...without the liabilities.
Do you have to put the house in an irrevocable trust? 5 years before they go into a nursing home still. Or can that be done even a year before
Depends on the state. nJ 5 year lookback😊
The advantage of that would be that the retiree would no longer (personally) own it...and would not figure into his income or assets.
Brother that mic looks really nice. I hope you decide to choose it as the audio source for videos eventually instead of the camera's microphone.
when you put your property into irrevocable trust, does value get reassess in California?
Sorry, but I am not licensed to practice law in California. I suggest that you reach out to a California attorney with that question. Thanks for watching though!
Tax consequences of real estate sale is nasty
rvmush, do not sell real estate once there is a large amount of equity, refinance, pull some $ out, or do a 1031 deferred exchange.
Can my personal paycheck go in irrevocable trust?
Your bank account can
@@dr.vthomas1389in order to transfer your paycheck from your job into the trust, would we file a new w-4 in the name of the trust and the trustee would file a 1041 at the end of the year?
Why not just buy LTC insurance?
Because they are cheap crooks.
I need to speak with someone in reference to this, I’m Devin from Texas.
can i put multiple properties into that trust? i am cash buying 8 homes that my children will have the option to reside in, maintain and pay taxes/insurance plus a few hundred a month to go into the trust.
@wompol7117 As the GRANTOR of the trust, you have the power to decide what you GRANT to the trust. How did things work out for you?
There is a possibility that the government may Tax all unrealized capitol gains. How will that fit in with a irrevocable trust?
How to protect my house from stepchildren? When I pass my desire is to donate the estate to a honest Animal charity. My spouse wants to live in the house until he dies.
there is a lot of confusion with this explanation
1.- you said the house can be ttransferred to an irrevocable trust.. but question ..a house that it is pay off already but what happenes if you still own a mortgage and you own on it..the bank is the lender still ..can you put that house that you dont own into an irrevocable trust?...i heard you can not
2.- you said if the grantor can sell the home once it is on the irrevocable trust and buy another home.. question ' who will lend the money for the iirrevocable trust to buy another home if the home cost 500000 dollars for example and the trust has only have 200000 dollars after the first home sell who will lend the money that needs to buy the new home.to the irrevocable trust ?..... i was told an irrevocable trust can not get a loan to buy a home....only the irrevocable trust can buy another home only if if the irrevocable trust have enought money already..in other words paying cash....but if it is a loan need it to buy a home a noone will lend money to an irrevocable trust to buy a home becuase an irrevocalbe trust is just a paper can you explain it please; if i am correct or not
You buy the house, you name the trust as the beneficiary. Very simple. The trust then outlines who it goes to
You seem to be suffering from some misunderstanding. Once the trust is created...the Grantor is "out of the picture!!!" This is why the person with some knowledge of these things sets things up so that he becomes the Trustee, NOT the Grantor.
If I want to provide a home to my daughter to live in or draw rental income from after I’m gone is an irrevocable trust best? Don’t want her to lose it if she’s ever in bankruptcy.
I saw on another video, that transferring the home into an LLC, and have the LLC in a trust provides extra protection. I think in this case revocable works? Your daughter would be the trustee of the trust, but wouldn't own the LLC?
Can you please tell me in the state of Tennessee where can I find a list of items that can be counted as deductions in an irrevocable trust as far as tax Returns Purposes
Cost for the trust? What ongoing fees?
What about taxes, insurance, upkeep, utilities, etc?
What happens if the trust does not pay those, especially taxes?
700 dollar cost from fred santili
@@kevinjoseph517 That's outrageous!
$700 for $70 worth of time an paperwork?
For this kind of trust, the tax liability may be MUCH less. And, if the trustees are properly chosen (like your family member or close friend), this is not likely to occur. Cost? Depends. If done by a lawyer, maybe a few hundred bucks. If YOU do it, virtually free....though the trustees would have to "keep on top" of things (like with regular meetings and the taking of minutes).
@@456zounds And if you pay little to no taxes?
What about to put the 401K in the irrevocable trust
Trustee here in an irrevocable trust where theres 2 properties, can i take one property out of the trust?
Well in this scenario the grantor is also a beneficiary
What does it mean? Please explain who is going to pay tax on $200K gain in value
lol either the trust pay the taxes or the beneficiaries does depending the language and what type of trust
THAT would be a MASSIVE mistake. There MUST be separation between the Grantor and Trustees (and beneficiaries)!!!
does the person you put in charge of the trust, if they fall into debt, can the house be taken away if they owe money or run into financial trouble?
No. The trustee's personal finances have nothing to do with the trust. Unless they are also a beneficiary.
What happens to an irrevocable trust when you die.
It continues to live. Hopefully, you've arranged things so that there are new trustees and beneficiaries.
If the parent”grantor “ sells the house can the trustee take that money if they are the sole beneficiary and place it into a personal checking account?
You're NOT getting it. The Grantor (someone like your best friend or lawyer) creates the trust, then--essentially--'disappears," and the Trustees now run things (for the benefit of the Beneficiaries, of which you will probably be one). The Grantor has NO control (and that's PERFECTLY fine)!!! Unless you've set things up wrong...and an adverse party could pretty easily challenge the trust (and you're likely to be subject to taxes...like any other person (or entity). Because, you'd ...then...have a "Grantor Trust" which is the only kind the IRS recognizes...and NOT a "Pure Trust" (AKA Common Law Trust).
Do you need to annotate in the title of the property of the owner that a irrevocable trust was made.
You have to make the trust the beneficiary.
If the taxes are paid nothing can be done . But you can't sell it, or barrow money on it.
The Trustees probably COULD borrow on the property.
My parents have an irrevocable trust. They believe the Trustee should reimburse them money for the property taxes, insurance and any improvements they made to the property. Is this possible? It’s my understanding that the assets are protected and they should use the dividends from the stocks in the trust to pay for these items.
Depends on the terms of the trust
@@Corkfish1
Thanks for your comment. I just found out from the attorney that they can be reimbursed for the house they paid out of pocket but otherwise, they are only entitled to the dividends from the irrevocable trust.
@@amya9597 Sounds like a Simple Trust. Beneficiary is entitled to income but capital gains are taxed in the trust.
i recently placed a rental property in a trust, and made an LLC the beneficiary. i attempted to get insurance on the property and the insurance company is asking to see the trust document. my understanding is trust documents are private and not to be shown to anyone. should i allow the insurance company to see the trust?
No!! I wouldnt but lets see if a pro knows more. I would draw up a certificate of my own 🤪
@@daniellewallace2047 Yeah i didnt show them the document. i have however found another company that doesnt require me showing the trust
I was told by my attorney to give them the first page which names the trust and its date of birth and the final page which has your notorized signature on it. Retain your originals!
@@daneasterly4063 sorry for the late response but thanks. i ended up going through a different insurance company who didnt require that information
@@daneasterly4063 My understanding is that you'll show them the "Certificate of Trust"..which would have the Bare Essentials, not the entire Declaration of Trust.
What about repairs to my home that need to be made? The Bank don't want to put put any monies to fix things that need to be fixed. I need a new fence and there is more than enough money in my trust to do so.
You make sure that the Trustees take care of this. You MAY even be one member of the Board of Trustees.
Parents put their money in an Irrevocable Trust with them as the Trustees. They are both diagnosed with dementia and we need to get access to the funds to place them into Assisted Living. Is there any way to reverse the Irrevocable Trust for their care?
The've LONG AGO..."blown it," as there should be a TOTAL separation of the Grantors and Trustees. They needed to have SOMEONE ELSE act as the Grantor...and designate them as Trustees. I.e., this is a FAULTY trust...which is attackable.
How can I live in a home ad not pay the mortgage?? If I put it in the irrevocable trust??
You make sure that the Trustees name you as the Beneficiary..who will, then, benefit from the Trust.
So would it protect the Home from being taken from a retirement home should you end up in one and run out of money?
Irrevocable trust, annuities and life insurance products protect assets
@@1maybeline I didn't know about annuities protecting anything.🤔
@@dennykeaton9701 An annuity is a life insurance product so yes it also protects assets. This is how OJ Simpson was able to keep his assets.
If the home were owned by the trust (a separate legal entity), there's no way they could take it. They MAY not even know that it exists...as (unike a corporation), it needn't be recorded.
@@ingridfitz5677 Yep, it seems that many folks make the mistake of forming a revocable trust...with assets which would be considered the same as that of the Grantor.