04 Feb I want to revoke a trust on my house. What do I do?
Q. I want to revoke my trust on my house. How much would this cost? I need to do this quickly and don’t know how to go about it.
A. There are several issues to consider here, but it sounds like you need some help from an estate planning attorney.
The answer to your question will be in the terms of the trust itself, said Nancy Heslin Reading, an estate planning attorney with Reading Law Firm in Newton..
But we’re going to tackle your question in general terms.
Reading said the threshold issue is whether the trust is revocable or irrevocable.
“If the trust is irrevocable, that means that the house cannot be taken out of the trust — at least not without a court order, something which is expensive and time consuming, and there is no guarantee you will get that because courts often deny the requests depending on the facts of the case,” she said.
So the first step is to make sure the trust is revocable.
The next item is who you are in relation to the trust.
Reading said only the trustee can sign a deed transferring a house that is owned by a trust — again, absent a court order.
The trust is designed to be managed by the trustee, not by any of the beneficiaries of the trust. So in order for anything to happen with the house, the trustee has to be in agreement that this should be done, she said.
The next issue is why the home was put in a trust in the first place.
“If the purpose was to lower the New Jersey estate tax, for instance, it makes sense to take the house out of trust because we no longer have a estate tax in New Jersey,” Reading said. “On the other hand, if the house was placed in the trust for purposes of asset protection as part of a long-term care plan, I can’t think of many reasons to take the house out of trust.”
The trust can sell the house and hold onto the proceeds or buy another house without jeopardizing the asset protection plan, she said.
Reading said the trustee, depending on the terms of the trust, might be able to move quickly if signing the deed transferring the house is consistent with the purpose of the trust. Otherwise, she said, this cannot be done quickly, and an attorney would charge at their regular hourly rate.
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This story was originally published on Feb. 4, 2020.
NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.