Should I create a Trust or Will to leave my house to my cousin? How? 20 Answers as of August 31, 2015

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?

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Law Office of Pamela Braynon | Pamela Y. Braynon
Taxes will be paid if the house is sold regardless if you leave a will or a trust. Its just that having the house in a trust the trust will be responsible for the taxes instead of the individual.
Answer Applies to: Florida
Replied: 8/31/2015
Christine Sabio Socrates Attorney at Law | Christine Socrates
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.
Answer Applies to: Ohio
Replied: 8/26/2015
O'Keefe Legal Services, L.L.C.
O'Keefe Legal Services, L.L.C. | Sean P. O'Keefe
In Maryland, passing the house via a living trust (instead of via will) may reduce any applicable probate fee, but both living (revocable) trust and will methods will likely result in the same tax consequences.
Answer Applies to: Maryland
Replied: 8/25/2015
Vandervoort, Christ & Fisher, P.C. | James E. Reed
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.
Answer Applies to: Michigan
Replied: 8/25/2015
Ronald K. Nims LLC | Ronald K. Nims
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.
Answer Applies to: Ohio
Replied: 8/25/2015
    The Schreiber Law Firm
    The Schreiber Law Firm | Jeffrey D. Schreiber
    Yes. Your cousin will take the house at its the fair market value when you die and if sold by your cousin in the future, any tax payable would be based on that value, which is called a "stepped up" basis. Your cousin would have to pay taxes on the difference between what the value was at your death and what your cousin sells it for. If you transferred it now, the value would be most likely be based on what you paid for the property when you purchased it and your cousin would have to pay taxes on the difference between what you bought it for and what your cousin sells it for.
    Answer Applies to: California
    Replied: 8/25/2015
    The Stutes Law Group, LLC
    The Stutes Law Group, LLC | Ronald E. Stutes
    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.
    Answer Applies to: Louisiana
    Replied: 8/25/2015
    Musilli Brennan Associates PLLC
    Musilli Brennan Associates PLLC | John F Brennan
    Need more details to assist in your estate planning.
    Answer Applies to: Michigan
    Replied: 8/25/2015
    Attorney At Law | James G. Maguire
    A will would work best. If she inherits the house and then sells it, there would be no tax consequences.
    Answer Applies to: Louisiana
    Replied: 8/24/2015
    Law Offices of Robert P Bergman
    Law Offices of Robert P Bergman | Robert P. Bergman
    A trust is the better option, to avoid the Probate process. With a trust you can keep the transfer largely private, and also avoid the time and expense of Probate.
    Answer Applies to: California
    Replied: 8/24/2015
    Wellerstein Law Group, P.C.
    Wellerstein Law Group, P.C. | Elisha Wellerstein
    You can leave it in a will to your cousin, but be aware that if you are married then you have to make sure that your spouse will not have the right of election on the house. A trust will cost some more money today, but will save a lot of time and expense compared to a will. A Will has to be probated which take time and costs many thousands of dollars. The benefit of a trust can also protect your asset from creditors if it is correctly drafted. Speak with an experienced Estates Planning attorney to find out what works best for you.
    Answer Applies to: New York
    Replied: 8/24/2015
    Law Offices of George H. Shers | George H. Shers
    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.
    Answer Applies to: California
    Replied: 8/24/2015
    Gates' Law, PLLC | Thomas E. 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.
    Answer Applies to: Washington
    Replied: 8/24/2015
    Law Ofices of Edwin K. Niles | 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.
    Answer Applies to: California
    Replied: 8/24/2015
    Patrick W. Currin, Attorney at Law | Patrick Currin
    Use a trust.
    Answer Applies to: California
    Replied: 8/24/2015
    Law Office Of Victor Waid
    Law Office Of Victor Waid | Victor Waid
    Create a trust estate plan; a will cost your heir some serious money.
    Answer Applies to: California
    Replied: 8/24/2015
    Ashcraft & Ashcraft, Ltd.
    Ashcraft & Ashcraft, Ltd. | Randall C. Romei
    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.
    Answer Applies to: Illinois
    Replied: 8/24/2015
    Law Offices of Richard M. Levy P.C.
    Law Offices of Richard M. Levy P.C. | Richard M. Levy
    To answer a question like this requires obtaining much too much information for a forum like this. You need to consult with a lawyer.
    Answer Applies to: New York
    Replied: 8/24/2015
    Goldsmith & Guymon
    Goldsmith & Guymon | Dara Goldsmith
    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.
    Answer Applies to: Nevada
    Replied: 8/24/2015
    Minor, Bandonis and Haggerty, P.C.
    Minor, Bandonis and Haggerty, P.C. | Brian Haggerty
    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.
    Answer Applies to: Oregon
    Replied: 8/24/2015
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