When you create a revocable trust, you (as the grantor/settlor of the trust), typically name yourself as the trustee of the trust. If you own a house and place that property into a revocable trust, you, as trustee, have the ability to sell any type of property, including your home, while it is in the revocable trust. The home is sold in the normal fashion, most likely through a real estate agent and the assistance of a title company
The sale may be subject to capital gains taxes. However, if the house you own is your primary residence and you lived in it for 2 out of the 5 years before it is sold, you may exclude up to $250,000 in capital gains (for single people) or up to $500,000 (if married and filing jointly).
Alternatively, if you have been named the trustee of a trust established by another person and it becomes necessary to sell a house included in their trust, there are a few things that need to be established prior to the sale. First, you should ensure that the trust agreement gives you the authority to sell the property. Next, you must determine the fair market value of the home and make any necessary repairs or renovations to be able to get top dollar for the property on behalf of the trust and its beneficiaries.
Successor trustees handle the management of your trust after you pass away or become incapacitated. A successor trustee can also be given the authority to sell a home held in a trust.
The proceeds from the sale of the home are deposited back into the trust account and all checks from the buyers are written to the seller: the trustee of the trust. If the owner of the trust has passed away, the proceeds are then distributed to the beneficiaries pursuant to the terms of the trust.
While this can be a fairly straightforward process, it can get complicated – especially if there are people involved who disagree with the sale of the home. If you would like to start the process of developing a trust or if you need advice on how to sell a Denver home in a trust, contact the experienced team at Brown & Crona, LLC. Our team of estate planning lawyers in Denver can help you navigate this process and help you learn ways to reduce taxes and assist with the administration of a trust. Contact us today at (303) 339-3750 or send us a message online to start the conversation about your estate and the best ways to protect it.