So, can I keep my homestead exemption? Texas law allows you to transfer your homestead to a “qualifying trust” and retain your homestead exemption on the home. For more on exemptions, see the state Comptroller office here: If you are age 65 or older, are disabled, or are a disabled veteran (or surviving spouse or child of a disabled veteran), there are similar homestead exemptions. Homes not occupied by the owner as his or her principal residence do not qualify for the exemption, and you may only have one homestead in Texas. In order for a home to qualify as a homestead (and be able to obtain a homestead exemption), the home (including a manufactured home) must be the principal residence of the owner applying for the exemption, and the included land may not exceed twenty acres. 1: Do I K eep My Homestead Exemption?įirst, what is a homestead? There is more than one meaning for the term “homestead” under Texas law, but for purposes of this article the focus is on a homestead for property taxes (also known as ad valorem taxes). > Can the bank force me to pay my mortgage in full if I put my home into my trust?Ĭoncern No. ![]() ![]() > Will I lose my Texas homestead exemption for property taxes? Any assets you retain in your personal name and not in the name of your RLT, however, will require the probate process to transfer those assets (those held in your personal name), which can add expense and delay to the administration of your estate. The trustee may execute and record a deed transferring the home from your RLT into the name of the new owner (i.e, the beneficiary or beneficiaries under your trust agreement). Upon your death, if all or the majority of your “estate” is held by your RLT, your estate may then avoid probate since the trustee of your RLT will not need court approval to distribute the assets to the beneficiaries. Generally, in order to have the RLT arrangement serve you well, all or most of your assets should be placed into the name of your trust. This process is referred to as the “ funding” of the trust. Once the agreement is executed, the next step is for you to title your assets into the name of your trust. When you sign the trust agreement for your Revocable Living Trust, you have only taken the first step in creating a thorough trust-based plan. ![]() Signing the Trust Agreement is Only the Start. If your estate plan includes a Revocable Living Trust (“RLT”), it is important to understand not only the terms of your trust but also the laws that govern the transfer of your real estate to the trust. In order to avoid or minimize probate (especially for individuals who own real estate or mineral interests in multiple states), clients sometimes include a Revocable Living Trust in their estate planning since assets in the trust pass outside of probate. If you own real estate in your personal name at death, some form of probate in the state where the property is located will be required to transfer the property to your heirs or beneficiaries. Why own a home in a Revocable Living Trust?
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