Who Owns the Home in a Trust?
When you create a trust, it can be a little overwhelming at first. That is why it is always good to take action with an attorney you trust. Depending on the situation, the laws may change, so make sure you have someone on your side who is looking out for your best interest.
If you have a simple living trust, the person in charge (the trustee) is the one who owns the home legally. This role of trustee will more than likely change as the circumstances of your life change. If you create a simple living trust today, then you are the legal owner of your home because you are also the trustee of your living trust. You are also the beneficial owner as the beneficiary.
You see, a trust divides title into legal title and beneficial title. You are in both positions in a living trust, but after you are hospitalized or pass away, everything changes.
A Simple Case Study to Determine Who is the Trustee
To illustrate a few scenarios, we are going to refer to a married couple named John and Rebecca. If John and Recebba create a living trust, then they are both the trustees and owners of their home. They will both be considered trustees until they pass away.
If John or Rebecca passes away after the living trust is created, then the other spouse becomes the sole trustee and owner. If both spouses die, then the trustee becomes whoever they designated in the details of the living will. For this example, we will say they left their son, Stan, in charge of the trust. Upon the deaths of both his parents, Stan becomes the trustee.
Now, another possibility is that John and Rebecca want Stan to hold some money for an unrelated person named Gabriel. This happens a lot and is allowed. In this situation, Stan would still have his name on the title because he is still the trustee while Gabriel is just the beneficiary of John and Rebecca’s trust. In other words, Stan is the title owner while Gabriel is the beneficial owner.
One thing for sure is that you will need a certificate of trust if you go to any bank and try to open an account for yourself. A certificate of trust is a document that details the legal existence of your trust. It includes the essential information of your trust without revealing all of the details. This is especially helpful when you want to prove to a lender that your trust is legitimate, but you do not necessarily want to expose all of your private information to that person. Usually, this document is only two to three pages in length.
If this is your first time looking into estate planning, it is okay if you are feeling a little confused. There are a lot of different roles going on, and the roles seem to shift depending on someone’s marital status, lifetime, and dependents. If all of this is new to you, do not shy away from it. Instead, lean into this new experience and let Aliav Law guide you through the process.