25 Feb Can I sell my house after I put it in a trust?

Q. I want to put my house in a trust and leave it to my step-son when I pass. The house is paid for, free and clear of mortgage. What happens if I put it in a trust and then decide to sell it?
— Homeowner

A. It’s a great question.

There are two main kinds of trusts: revocable and irrevocable.

You probably want to put your home in a revocable trust, said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park.

Assets in a revocable trust avoid probate but remain in your control because you can always amend the terms of the trust or terminate the trust, she said.

“You can name yourself as a trustee,” she said. “You will still be able to live in your home and sell it and dispose of it as you wish upon your death.”

Assets in a revocable trust are available to pay creditors and subject to tax upon your death, although there is no inheritance tax when property passes to a step-son, Romania said.

“If you do sell the property and it is in a trust, even a revocable trust, you will not be entitled to the realty transfer fee senior citizen partial exemption, as that is a personal exemption not available to property in trust,” she said. “Depending on the fee to be incurred and the value of the exemption, you may want to transfer the property back into your individual name before selling it.”

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This story was originally published on Feb. 25, 2022.

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.