How To Sell a House Held in a Family Trust
It’s not unusual for homeowners to use trusts to oversee their assets, including their houses. They may do so to manage those assets or simplify the transfer of property to a beneficiary. However, if you want to sell your house in Chattanooga, TN, after putting it in a trust, the process may be more complicated than you assumed.
Below, Chattanooga Property Solutions breaks down what homeowners should know about selling a house in a family trust.
How Trusts Work
Learning all about legal trusts is an important step in understanding how to sell a property that’s held in one. A trust is a legal structure used to hold and manage a person’s assets. The settlor establishes the trust and transfers ownership of those assets to a trustee, who oversees them for the named beneficiaries.
Trusts can be classified in several ways, including:
- Irrevocable trusts that the settlor generally can’t alter
- Revocable trusts that the settlor may dissolve or alter
- Living trusts created while the settlor is alive
- Testamentary trusts that go into effect once the settlor dies
Homes aren’t the only assets a trustee can oversee. Trust property can also include bank accounts, valuable personal belongings, and other items.
Is Selling a House in a Family Trust Possible?
If you want to sell a house held in a trust, you must first consider the type of trust you’re dealing with. A real estate transaction involving a revocable trust is relatively straightforward, in most cases.
If you’re the settlor and the trustee, you may have a couple of options. First, you could sell the home as the trustee and put the proceeds back into the trust for your beneficiaries. The second option is to title the home back into your name to sell it directly.
The sale process is more complicated with an irrevocable trust because the settlor can’t modify the trust agreement. Modifications may be allowed if the beneficiaries consent. Otherwise, the trustee is in charge of the assets.
You could sell the house through the trustee, or you can get permission from your beneficiaries to modify the trust. Taking the last step may mean the title transfers back to you, allowing you to sell the home yourself.
Tips for Selling a Home Held in a Trust
Every case is unique, but you can follow these tips to streamline the sale of a trust property:
- Collect all trust-related documents, including any agreement amendments.
- Discuss the sale with your beneficiaries and trustee.
- Be prepared for potential capital gains taxes unless your home qualifies for an exemption.
Consider a Cash Sale for Your Residential Property
At Chattanooga Property Solutions, we offer real options for every homeowner looking to sell their property, including cash home sales. We offer comprehensive solutions, whether you’re selling a house in a family trust or selling a house in probate. Our professionals have experience buying houses as they stand, regardless of the homeowner’s circumstances, so we can help you navigate the home-selling process.
We’re your one-stop real estate solution in Chattanooga, TN, so call (423) 454-3070 to start your free quote today.