What are the pros and cons of placing a personal residence in a trust?
Terry Says: You titled your question IRREVOCABLE trust — and you definitely don’t want to do that! (At least, not unless you are trying to transfer huge wealth, in which case you would have a tax advisor and not be writing to me!)
But if you are talking about a REVOCABLE LIVING TRUST, this can be a good idea for many reasons. First, you have to create this revocable living trust in your name (and that of your spouse if you are married). Then you transfer title to your home, and other assets into the name of the trust. There is no tax implication and no cost for doing this, and it does not change anything such as your cost basis or property tax bill. BUT when either of you becomes incapacitate or dies, your named successor trustee can take over and pay the bills or sell the home, without going through the court probate process of transferring title. That’s because you already transferred title to the name of your revocable living trust.
See the extensive chapters on this in my book, The Savage Truth on Money — or ask your estate planning attorney.