What happens when a home inside a trust is sold?
Someone who serves in the role of trustee is responsible for administration of a trust. Sometimes this can be for a loved one who recently passed away. Knowing what to do in this situation could be very complicated if you were not involved in the original estate planning.
Typically, assets that are transferred into an irrevocable trust will be considered a completed gift and not included in the estate for estate tax purposes, meaning that there would not immediately be a step up in basis for the fair market value of that home based on the death of the deceased. However, irrevocable trusts may be drafted so that the settlor of the trust retains certain powers and rights saying that gifts to the trust are incomplete.
This is why it is so important to understand how to appropriately use a trust in your estate planning strategies. If you are a trustee currently serving in this role, you may also wish to get help from an experienced and knowledgeable probate lawyer.
A probate lawyer can help you navigate the process of closing out estate administration. If you want to avoid these questions and the possible confusion for your loved ones in the future, set aside time to speak with an estate planning lawyer today about creating your own plan.