Planning ahead for the passing of a loved one can help ease the emotional burden by eliminating the added stress of managing estate details during a difficult time. For those with significant wealth, high gift tax rates may already be a concern. Proactively arranging the distribution of assets not only ensures that your wishes are honored but also provides comfort to those left behind, allowing them to focus on healing. At the same time, it grants you peace of mind, knowing your home and legacy are secure for the future.
A trust shifts property ownership from your name into a legally binding arrangement managed by a trustee, ensuring your assets are protected and smoothly passed on to your heirs. Without this safeguard, families often face the turmoil of legal disputes, probate complications, hefty estate taxes, and persistent creditors—all of which can turn an already difficult time into a financial and emotional battleground.
If this isn’t the future you envision for yourself or your family, here’s what you need to know about real estate trusts in Kentucky.
Why Trusts Matter
Placing real estate into a trust in Kentucky allows beneficiaries to bypass much of the bureaucracy and delays associated with probate court, easing the burden during an already difficult time. Probate can be a lengthy and costly process, often dragging on for months or even years. Additionally, the court manages the distribution of funds and ensures any outstanding debts are settled before assets reach the heirs. A will provides clear instructions for a trustee to follow regarding asset distribution, but without one, the court applies state inheritance laws to determine who receives the property. If the property is sold, heirs typically receive their share at closing.
There is a lifetime exclusion on the transfer of gifts or estates which is adjusted annually for cost of living increases, in 2021 the amount was set at 11.7 million per individual and 23.4 million for couples. After your lifetime exclusion is met, if you’re married and your spouse is deceased, their exclusion rolls over to the survivor. If your home is under a trust, your heirs will realize gift tax savings, ranging from 8 to 40 percent and generally paid by the gifter. The estate portion of this tax is applied upon death, and the trust may also protect the home from creditors. Another benefit of real estate trusts is that they are private transfers of wealth, not a matter of public record as with probate.
Setting Up a Trust
When considering real estate trusts in Kentucky, it’s essential to understand that there are many different structures available, each serving a unique purpose. Carefully evaluating your options ensures you select the right trust for your estate’s needs. Your assets may be more valuable than you realize, and establishing a trust can provide significant benefits for your heirs. To begin, gather all essential documents and take a realistic inventory of your estate.
If you wish to secure long-term financial support for a loved one with special needs, a special needs trust ensures they receive assistance without jeopardizing essential benefits. For heirs who may not manage money wisely, a spendthrift trust provides structured distributions while shielding assets from creditors. Opting for an irrevocable trust means your decisions are set in stone—once assets are transferred, they cannot be changed. However, this permanence comes with advantages, as irrevocable trusts often grant beneficiaries significant estate tax exemptions, making them a strategic choice for wealth preservation.
The process of creating a trust can be as hands-on or guided as you prefer. While you have the option to draft one yourself or use an online service, seeking professional legal advice is highly recommended to ensure everything is properly structured. Another crucial decision is selecting a successor trustee—someone you trust to manage your estate. It’s essential to discuss this responsibility with them in advance to confirm they’re willing to take on the role. Once the trust documents are prepared, the final step is transferring the property deed into the trust. As the trustee, you will hold the title, which must include your name and the exact date as required for legal accuracy.
At JTM Real Estate LLC, we’re here to assist if you need to sell property following the loss of a loved one. We aim to minimize your stress and time commitment by offering a fair cash price and completing the sale in just a few days or weeks. We recognize how challenging this time can be, and our compassionate, experienced team is ready to address any questions or concerns you might have. Reach out to us by sending a message or calling JTM Real Estate LLC at 270-306-8685.