Should you put your home into living trust?
Generally, a lady bird deed a/k/a an enhanced life estate deed, is a better tool to avoid probate on your home.
Attorney Chris Merrill: Should I put my home in a trust?
Attorney Tom Olsen: Their earlier text was asking us should they put their home in an LLC? The answer is no. No way. You don't need to. Number two you wouldn't get your real estate homestead exemption for real estate tax savings purposes. Should they put their home in a trust? Well, first I want to clarify this. Folks, when you hear about trusts out there, they're talking about revocable living trust. That is a tool for avoiding probate. It is not a tool to protect your assets from creditor claims. With a revocable living trust, any creditor then get your money with a trust, without a trust can get your money with a trust.
A revocable living trust is for the purpose of avoiding probate. If they're saying should I put my home in a trust to protect it from creditors? No, because it's not going to work. If you want to put your home in a trust for the purpose of avoiding probate, then yes, we recommend it but we have a small twist on that. We use a ladybird deed on your home. That's also a tool for avoiding probate. That ladybird deed would state that as long as you're alive that home remains in your individual name but upon your death, that home would automatically go to your trust. No headaches, no hassles, no probate.
Attorney Chris Merrill: Exactly, and we have a free booklet on this tool, the ladybird deed, and you can go to our website at olsenlawgroup.com. You can fill out our very brief form with your first and last name and mailing address and we are happy to mail that booklet to you. Exactly like you said, Tom, if they want to avoid probate, yes, a trust could be the answer along with the ladybird deed, and that combination would allow them to avoid probate but a trust is not the answer for creditors.
We do get that question often. They think that if they put their home in an LLC or in a trust it protects them from creditor claims. I think that they're very surprised to hear that it's the opposite. The opposite is leave it in your individual name. Your homestead if kept in your individual name gives you the highest protection from creditor claims by leaving it that way.
Attorney Tom Olsen: Chris when we do our Medicaid and nursing home, protecting your life savings from nursing homes, one of the terms we use is separating fact from fiction because as far as nursing homes and Medicaid out there, there's a lot of misconceptions. With living trusts people coming, they came in this morning, "Tom, I need to have a trust to protect my assets from creditors."
No, it's about avoiding probate. It is not about protecting your assets from creditors. Folks, my name is Tom Olsen. The name of the show is Olsen on Law every Saturday at 1:00 PM right here on WFLA. Thanks for all your great calls and questions and texts. We do so much appreciate it. Don't forget Monday through Friday, 9:00 to 5:00, all the lawyers at the Olsen Law Group we're always happy to give you a few minutes of free legal advice. Check us out, olsenlawgroup.com. We'll be back next week.