Can Real Estate Held in a Trust Be Sold?

19 Jul Can Real Estate Held in a Trust Be Sold?

Generally, yes! You can sell a home or other property that is in a trust. You will need to get advice on the specific terms of the trust in order to be sure that you can sell the home. It will also depend on whether you are the trustor, trustee or beneficiary of the trust and what kind of trust it is. The trustor is the person who sets up the trust and puts their assets in it. The trustee holds the trust and has control over it until it is time to pass it to a third party – the beneficiary. 

Why Place a Home in a Trust

The biggest benefit of placing your home in a trust is to avoid probate. Ownership may be transferred more quickly and with less expense than if the house were to be probated.

A trust is about protecting real estate, cash, life insurance and other assets that might otherwise be in peril or be challenging to deal with during estate planning. Putting a home in a trust can protect it and make it simpler for the beneficiary to sell it once they inherit it — if that is what they would like to do. By creating and transferring your property to a trust, you could save your heirs thousands of dollars in probate fees. 

Types of Trusts

Revocable Trust

Revocable or “living” trusts can be dissolved or changed at any time. This means that the trustor who is also serving as the trustee and beneficiary, will always be able to sell the property placed in a revocable trust. You can then either have the proceeds from the sale of the property deposited to your trust account or keep the proceeds personally.

 If you are considering placing a home in a revocable trust in order to maintain the option to sell it for yourself in the future, you should know that there are downsides to having property in a revocable trust. Revocable trusts may be costly to set up and the home will not be protected from creditors when you pass.

Irrevocable Trust

Unlike revocable trusts, the terms of an irrevocable trust cannot be changed and the trust may not be dissolved. Property that is placed in an irrevocable trust can still be sold provided all of the beneficiaries of the trust are in agreement. With limited exceptions, when you sell property inside of an irrevocable trust, the funds usually need to remain in the trust.

Irrevocable trusts, just like revocable trusts, can be costly to set up and maintain. Keep in mind, the trust, not you, owns the home, and trusts require more record keeping.  

Land Trust 

Compared to revocable and irrevocable trusts, a land trust is a simpler, less expensive type of trust. Unlike a revocable trust, the beneficiary, and not the trustee, controls the trust; the trustee will execute deeds and mortgages and act as directed by the beneficiary.

Whoever creates the land trust typically retains sole control over the property. Upon his or her death, the property automatically transfers to the beneficiaries without the need for probate.

Contact Mages & Price LLC Today

Trusts are complex. Be sure to seek legal advice before you make any decisions related to transferring your real estate to a trust.

Mages & Price LLC works with home sellers across the Chicagoland area, streamlining the sales process and protecting your investment, time, and home. We understand how stressful selling a home can be and aim to minimize anxiety and maximize profit. 

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