Can you explain to me what a realty trust is? I currently own property and I recently lost my husband, I found out that he put it in a realty trust.
Almost any type of trust can own real estate. You really need to provide more detail to address the question properly. Even if you explained the type of trust, the real key is what the document that creates the trust actually says. Many of the names given to "different" types of trusts are vague, or worse, very misleading. You also didn't even indicate if the "property" is your home, a rental property or what. That is also important. All that being said, it might be that (and we have to guess here) you're speaking about a by pass trust under your late husband's will (or a by pass trust under your late husband's revocable living trust). If that's correct, then the trust might own say half the house (the other half might be in your name or if you have a living trust in the name of your trust). If this is correct, it won't change (maybe) your day to day life in the house, but you had best meet with a lawyer and CPA to review all the implications of the trust owning part or all of the house. Who are the trustees? Is a child or other heir a trustee who might give you a hard time? If there is a mortgage on the house does the transfer of the house to a by pass trigger the due on transfer clause in the mortgage (so that it might have to be repaid)? If a by pass trust owns 1/2 the house you won't qualify that 1/2 of the house for the home sale exclusion when you and the trust sell the house (and the trust has to be party to any such contract). There is a step up in basis on your husband's death on 1/2 the house. Property tax deduction - who pays and who gets the deduction? The trust also has to file an annual income tax return (another cost to you).
So........if I guessed right you have a lot of questions to ask your advisers. If I guessed wrong, well......We tried.
Subscribe to our email list to receive information on consumer webcasts and blogs, for practical legal information in simple English, delivered to your inbox. For more professional driven information, please visit Shenkman Law to subscribe.