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Wednesday, August 19, 2009

Should I Hold Title to Real Estate in a Living Trust?

Dean C. Piller by GRI Instructor Dean C. Piller
Teaches GRI Course 109 - Residential Real Estate Finance, West Los Angeles College Instructor, Mortgage Broker
View future classes taught by Dean C. Piller

Should I hold title to real estate in a Living Trust? A question that should be referred to an attorney and or tax expert qualified to evaluate your particular situation. Here are some general facts to know about Living Trusts.

Why do people use a Living Trust? Answer: To minimize or postpone death taxes, avoid time consuming and expensive probate, and shield property from attack of certain unsecured creditors.

Can a Trust hold title to a property? Answer: No! The Trustee actually holds title on behalf of the trust.

Can a Trustee borrow money on real estate in the Trust? Answer: Yes, if it is permitted by the trust. Be aware that some real estate lenders will not loan money to a trust, and the parties may be required to deed out of the trust to secure a loan, then deed the property back into the trust after the loan has funded.

Conclusion: Complex tax and legal questions should be referred to competent professionals.

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