Posted by: Woodfork Law | March 25, 2013

A Living Trust for Simple Estates? maybe

Many families require only a simple will, a living will, and other advanced directives. Often, a Living Trust is not cost-effective for simple estates; however, there is a possible exception.  A simple estate may require a living trust when there is property located outside the state you are living.

The only thing worse than probate, is multiple probates, in multiple states.  When you pass with property located outside the state, the property must be probated in each respective state.

One common way to avoid multiple probates for out of state properties is to transfer those properties into your living trust. You can do this by simply having a lawyer in the state where your property is located draft a deed transferring the title into the trust name. You need a lawyer in that state to re-title the property because they know the technicalities of the local area.  You don’t want to find that you did everything by the book in Arizona, sent the deed to the land records in the state where the property was located, then later find something is wrong with the title.

Also, as with any transfer of property to a living trust, you should verify that any “due-on-sale” clause is not triggered.  Basically, a due on sale clause means that if you transfer title to your property that has a mortgage, the mortgage holder is permitted to call the entire mortgage due immediately.

http://www.woodforkandassociates.com

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