If you have an irrevocable trust, can you never sell your house if things change?
If you put a house in an irrevocable trust does that mean the owner may never decide to sell the house if matters change?
If you put your house in an irrevocable trust, that means the trust owns the house. Period. "Irrevocable" means what it says"”can not be changed. Whether the house can be sold by the trust depends on whether the trust document permits that or not. Even if the house can be sold, the proceeds must remain in the trust. Whether those proceeds can be used to buy a new house again depends on the terms of the trust.
I do not know why you are considering putting your house into an irrevocable trust. Generally, there is no reason to do this. You can put your house into a revocable living trust in order to avoid probate. Because that trust is revocable, you can remove the house from the trust at any time, and sell the house as you wish.
Be sure that you understand the drawbacks, and benefits if any, of putting your house into an irrevocable trust. Only if you decide that somehow, for you, there wold be substantial benefits that outweigh the drawbacks should you put your house into an irrevocable trust.
Your trustee can sell your house for you. And the money can be withdraw at any time so don't be afraid of an irrevocable trust.
The reason you put assests into a irrocable trust is to save them from being seized by nursing homes or medicare if you or your spouse has to enter a nursing home. The look back period is 5 years so keep that in mind.
Yes, your trustee can sell your home for you, but the proceeds of the sale must remain in the trust. If the trust document allows, those proceeds can be used to purchase a new home for you, but the new home will still be owned by the trust.
If the trust document allows those proceeds to be withdrawn, even if they are not withdrawn, those proceeds would not be protected from being seized by a nursing home or Medicare.
One of the main benefits of gifting your home to an irrevocable trust, not mentioned in the original answer, is this removes the value of your home from your estate. For most people, this is not vital for federal tax purposes, however, in New Jersey, if the value of your estate exceeds $675,000, you will pay estate tax to the state.
The above info was very helpful. Thank you
Can someone tell me if your home is already in an "Irrevocable Trust" can a loan (HELOC, Construction Loan for renovations, upgrades, etc.) be made utilizing the homes equity?
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