Consider selling property through a revocable trust | Features | thenewsenterprise.com – Elizabethtown News Enterprise

When a loved one becomes unable to care for himself at home, the choice to move him is more than an emotional decision.

Determining care needs and how those needs will be met is overwhelming enough, but when the individual owns a home, the logistical matters of continuing to pay for or sell the home must be handled carefully.

Families may choose to hold on to the home. This can be a source of comfort to the homeowner, simply knowing that his or her home and personal belongings are there if a return home is feasible.

Many people fear moving to assisted living or into a nursing home because they lose the sense of “home.” Keeping the house available, at least for a short time, can abate some of those fears.

However, holding onto the home is usually a short-term solution. Home ownership comes with a cost: taxes, insurance, utilities and maintenance. Even empty houses require certain bills to be paid and unoccupied homes easily can become run-down or even fall victim to vandalism.

More critically, most homeowners simply are unable to pay the costs associated with the empty house on top of the caregiving, assisted living or nursing home costs. At some point, the house is likely to be sold.

Selling properties, even in a “seller’s market,” is not a fast process. Contracts are negotiated, inspections and appraisals conducted, problems addressed, title searches made and financing completed through a lender. The selling process usually takes several weeks and sometimes several months.

One major problem in real estate sales where the seller is critically ill is that the long duration of the process can create risk to both seller and buyer. If the owner dies during the sale, the property sale is suspended until someone is given the right to transfer the property, usually through probate.

A case would have to be filed in the local probate court’s office, then the intended executor must wait for the court to appoint him or her. This appointment may be well after the original closing was scheduled. The buyer may be unable or unwilling to wait an unknown amount of time for the real estate transaction to close.

A better option is to transfer the real property into a revocable living trust prior to, or even during, the pendency of the sale. If the individual lives after the sale closes, the money in trust simply will be used according to his or her wishes. However, if the seller dies during the sale, there is no need to wait for a court-appointed executor to receive the power to convey the property. The trustee of the living trust simply could sign for the transfer on behalf of the trust, resulting in no delay to the closing.

The trust owned property would be subject to the same tax-advantageous laws that the individual seller would have been subjected to regarding the stepped-up tax basis and limited inheritance tax. Assets would not be frozen within the trust, but simply would pass to beneficiaries according to the instructions within the instrument.

Revocable living trusts are not necessary for every estate, but the powerful flexibility often provides easy solutions to unexpected problems. For elderly or critically ill real estate sellers, using a revocable living trust can be a simple way to prevent costly delays.

Cynthia Griffin is an elder law and estate planning attorney at Burnett and Griffin PLLC in Elizabethtown. She can be reached at cynthia@bcglawcenter.com.

Cynthia Griffin is an elder law and estate planning attorney at Burnett and Griffin PLLC in Elizabethtown. She can be reached at cynthia@bcglawcenter.com.