QUESTION
Should I create a Trust or Will to leave my house to my cousin? How?
Asked on Aug 24th, 2015 on Estate Planning - California
More details to this question:
My house is paid off, when I die, I would like to leave my house to my cousin. Is it better to put it in a Trust or Will to eliminate the tax implications if she sells it?
14 ANSWERS
Corporate/Business Attorney serving Beachwood, OH
at
Christine Sabio Socrates Attorney at Law
Update Your Profile
There are other options available to you even beyond a trust or will but the best option would depend what your other assets are in your estate and what the values are. I would recommend speaking to an estate planning attorney who can evaluate your current situation, assets and goals and properly recommend the best option for you. It is difficult to answer your question without more information.
Answered on Aug 26th, 2015 at 1:36 PM
Appellate Attorney serving Grosse Pointe Farms, MI
at
Musilli Brennan Associates, PLLC
Update Your Profile
Need more details to assist in your estate planning.
Answered on Aug 25th, 2015 at 1:37 PM
Trust or Will won't make any difference in any taxes. A Trust, however, will avoid the probate process and will avoid having to pay the probate inventory fee based upon the value of the property. To be effective you need to: (1) create the Trust, and (2) convey title to the house to the Trust during your lifetime.
Answered on Aug 25th, 2015 at 7:49 AM
Commercial & Bankruptcy Law Attorney serving Powell, OH
at
Ronald K. Nims
Update Your Profile
Assuming that your house is one of your major assets, leave your house to your cousin in your will. It will minimize any tax she'll have to pay if she sells the house.
Answered on Aug 25th, 2015 at 4:47 AM
Estate Planning Attorney serving Baton Rouge, LA
at
The Stutes Law Group LLC
Update Your Profile
If the house is transferred at your death, whether by will or trust, it will receive the "step-up" in basis, which means that when she sells it, her tax basis will be the value of the house at your death. If you give it to her before you die, she would assume your basis, meaning the amount she receives greater than the price you paid would be taxable.
Answered on Aug 25th, 2015 at 4:47 AM
Probate Attorney serving New Orleans, LA
at
James G. Maguire
Update Your Profile
A will would work best. If she inherits the house and then sells it, there would be no tax consequences.
Answered on Aug 24th, 2015 at 9:25 PM
If you put it into a Trust which you do not control [so someone will have to pay that person unless the assets in the Trust produce income to pay the Trustee], and the trust terms state on your death it goes to your cousin, she will have to pay capital gains taxes on the property when she sells it and can only subtract your own cost basis to determine the net profit. ?If you leave it to her by a Will, her net profit will be based upon what the property was worth when you died [a stepped up basis]. But if she is going to live in your house as her home [primary residence], in California there is a $250,000 capital gains exclusion. So the answer depends upon several factors. Nolo Press produces some good books written in ordinary people's language on the topics. If you still are not certain, go to a probate and trust attorney to know how to do things. If you do something that is not the best solution for you, it might cost thousands of dollars that your cousin will lose. Also remember, your cousin might die first, marry someone you can not stand, or have a major fight with you. Make sure you can change your mind any time before you die.
Answered on Aug 24th, 2015 at 8:34 PM
Thomas Edward Gates
A will is fine. If it is a Trust she would not own it. If the Trust sells the house at a later date, it will be required to pay taxes. Gifting a house via a will allows the beneficiary to get a step-up in basis; which will reduce the tax she may have to pay when she sells the house.
Answered on Aug 24th, 2015 at 8:34 PM
Edwin K. Niles
There are no death taxes unless you are a multi-millionaire. If your cousin inherits (through will or trust) the property gets a stepped-up basis for capital gains purposes, so cousin could sell without income tax consequences. The purpose of a trust is to avoid the great expense and time delay resulting from probate of a will. A trust will cost you more than a will now, but will save your estate in the end.
Answered on Aug 24th, 2015 at 7:31 PM
Probate Attorney serving Newport, OR
at
Minor, Bandonis & Haggerty P.C.
Update Your Profile
This is a very substantial question; the question of whether you want a trust or a will involves all of the assets of your estate, and all the people involved. In general, in Oregon, I prefer the will. Probate is straightforward, court oversight is good, the process ends with a judgment that provides closure. Too often, trusts do not get administered right, or at all, leaving important steps undone. Also, please be advised that the standard estate planning trust, a revocable "living" trust, doesn't change anything about taxation, and it doesn't change anything about the ability of creditors to reach your assets. These are persistent urban myths. See a good estate planning attorney to discuss whether a will or a trust is right for you.
Answered on Aug 24th, 2015 at 7:27 PM
3 Awards
A trust avoids probate as does an ITF designation. Discuss you options with an estate planning attorney. This is opinion is solely based upon the facts presented in the inquiry. Additional facts may be important and may change the analysis. If you are uncertain, seek legal counsel. We are not your attorneys. This answer is being offered to assist you in determining if you need to retain legal counsel to assist you, not to resolve your issue through an email inquiry.
Answered on Aug 24th, 2015 at 7:26 PM
Trusts Attorney serving Sacramento, CA
at
Law Office of Victor Waid
Update Your Profile
Create a trust estate plan; a will cost your heir some serious money.
Answered on Aug 24th, 2015 at 7:25 PM
Commercial Attorney serving Chicago, IL
at
Ashcraft & Ashcraft, Ltd.
Update Your Profile
If you grant your cousin the house in your Will there will be a step up in basis at the time of your death. Assuming the value at your death is more than your basis in the house the capital gain when your cousin sell the house will be lower.
Answered on Aug 24th, 2015 at 7:25 PM