Preparing for the passing of a loved one can help you cope with the loss without the added stress of managing estate details. For those with significant wealth, the high tax rates on gifts can be a concern. By preplanning the distribution of your estate, you provide peace to your grieving loved ones and gain peace of mind about the future and the fate of your home.

Creating a trust transfers property ownership from your name to the trust, managed by a trustee, offering protection for your heirs. Without such preparation, your heirs may face infighting, probate court, estate taxes, and creditors.

If this isn’t the scenario you envision for yourself or your loved ones, here’s what you need to know about real estate trusts in Dallas-Fort Worth.

Why Trusts Matter

Deeding real estate into a trust in Dallas-Fort Worth allows beneficiaries to bypass extensive paperwork and bureaucracy during a difficult time by avoiding probate court. Probate is a lengthy and costly process that can take several months or even years to complete. The probate court oversees the distribution of funds and ensures creditors are paid from the decedent’s estate. A will specifies how the decedent wanted their trustee to distribute the assets. Without a will, the probate court follows state guidelines for inheritance and property title transfer to the heirs. The heirs will receive the money at closing when and if the property is sold.

There is a lifetime exclusion on the transfer of gifts or estates, which is adjusted annually for cost of living increases. In 2021, the exclusion was set at $11.7 million per individual and $23.4 million for couples. Once your lifetime exclusion is reached, if you are married and your spouse has passed away, their exclusion transfers to the surviving spouse. With a home in a trust, your heirs can benefit from gift tax savings ranging from 8 to 40 percent, typically paid by the gifter. The estate portion of this tax is applied upon death, and the trust may also shield the home from creditors. Additionally, real estate trusts offer the advantage of private wealth transfers, unlike the public record involved in probate.

Setting Up a Trust

Another important aspect of real estate trusts in Dallas-Fort Worth is the variety of structures available. It’s crucial to carefully examine your options before deciding which type of trust best suits your estate. Your estate may hold more value than you realize, and creating a trust can ensure that your heirs inherit it. Begin by gathering all your important documents and realistically assessing your assets. If you want to provide supplemental income to a family member, you can create a special needs trust. For a financially irresponsible family member, a spendthrift trust can protect against their creditors and limit access to the principal funds. An irrevocable trust means your decision is final and cannot be changed once your home or other assets are transferred to the trust. However, irrevocable trusts often qualify your beneficiaries for estate tax exemption, so this option should be considered carefully.

Depending on your comfort level with the process, you can create your own trust or use an online service. However, it is advisable to seek professional legal counsel. You will also need to decide who will handle the estate as your successor trustee; ensure they are willing to take on this responsibility. After creating the trust documents, you will transfer the deed into the real estate trust. As the trustee, you will hold the property title, which should include your name exactly as it appears and the date.

TX Home Buying Pros can assist you if you need to sell after the loss of a loved one in Dallas-Fort Worth. With minimal time involved, we aim to make the process as stress-free as possible by making you a fair cash offer and closing within days or weeks. We understand this is a difficult time, and our experienced professionals are happy to answer any questions or concerns you may have. Send us a message or call TX Home Buying Pros at (214) 296-2343 to get a cash offer.