Estate planning involves making important decisions about your assets, including your home. One such decision many homeowners in New Hampshire face is whether to add their house to a trust. This decision can potentially provide numerous benefits, including avoiding probate, maintaining privacy, and ensuring a smooth transition of property after death. However, the process can seem daunting without proper guidance. In this blog post, we'll explore the process, benefits, and potential drawbacks of adding a house to a trust in New Hampshire.
Benefits and Drawbacks of Adding a House to a Trust in New Hampshire
Before making the decision to add your house to a trust in New Hampshire, it's important to understand both the advantages and potential disadvantages.
Benefits:
- Avoiding Probate: Probate is a legal process that can be time-consuming and expensive. By placing your house in a trust, it can pass directly to your beneficiaries upon your death, bypassing the probate process.
- Privacy: Trusts are private documents, unlike wills, which become public record after your death. This means the details of your estate will remain private.
- Control: Living trusts provide a high level of control over your assets. You can specify the terms of the trust, and you can change or revoke the trust at any time.
Drawbacks:
- Cost: Setting up a trust can be more expensive upfront than creating a will, due to the complexity of the document and potential legal fees.
- Maintenance: Trusts require ongoing management, which could mean additional time and costs.
- Complexity: Trusts are more complex legal documents than wills, and may require more effort to set up and manage.
The Process of Adding a House to a Trust in New Hampshire
Adding a house to a trust in New Hampshire involves several steps. Here's a general outline of the process:
- Create a Trust: The first step is to create a trust document. This can be done with the help of an attorney or through an online service like Snug.
- Property Appraisal: Before transferring your property into a trust, it may be beneficial to have it appraised to determine its current market value.
- Transfer the Title: Next, you'll need to transfer the title of your house to the trust. This is done by creating a new deed with the trust's name as the grantee.
- Record the Deed: The new deed must be recorded with the county clerk's office in the county where the property is located.
- Notify Your Mortgage Lender and Insurance Company: Finally, don't forget to notify your mortgage lender and insurance company about the change in ownership.
Costs of Adding a House to a Trust in New Hampshire
The costs involved in adding a house to a trust in New Hampshire can vary based on several factors. These costs may include:
- Legal Fees: The cost of setting up a trust can range from a few hundred to a few thousand dollars, depending on the complexity of the trust and whether you hire an attorney.
- Property Appraisal Fees: The cost of a home appraisal can range from $300 to $400.
- Deed Preparation and Recording Fees: There will be a fee to prepare and record the new deed. This can vary by county.
- Mortgage and Insurance Considerations: If your house has a mortgage, you'll need to notify your lender that you're transferring the property to a trust. Additionally, you'll need to inform your homeowner's insurance company about the transfer.
Estate Taxes in New Hampshire
New Hampshire does not have an estate or inheritance tax. However, you'll still need to consider federal estate taxes. The federal estate tax exemption for 2024 is $13.61 million for individuals and $27.22 million for married couples. Transferring your house to a trust does not exempt it from federal estate taxes.
Selling a House in a Trust in New Hampshire
Selling a house in a trust is similar to selling a house not in a trust. However, the trustee will be the one to handle the sale process. The proceeds from the sale would then go into the trust.
Adding a House with a Mortgage to a Trust in New Hampshire
If your house has a mortgage, you can still transfer it into a trust. However, you'll need to inform your mortgage lender about the transfer. Some lenders might require a copy of the trust agreement to verify that it is a revocable trust.
Refinancing a House in a Trust in New Hampshire
Refinancing a house in a trust is possible, but it can be a bit more complicated. You may need to temporarily remove the property from the trust, refinance the home, and then put it back into the trust.
Transferring a House out of a Trust in New Hampshire
If you want to remove your house from a trust, the process will depend on the type of trust. If it's a revocable trust, the process is fairly straightforward. If it's an irrevocable trust, you'll need the consent of the beneficiaries and may need court approval.
