How Can My Wife and I Protect Home in Realty Trust for Our Children?
My house is in a Realty Trust, set up by myself and my wife. How can I be sure that my children will always have access to this house?
Realty trusts are a method of owning real estate used primarily in Massachusetts. They can serve a number of purposes, including hiding the true ownership of property, facilitating ownership by several people or entities, such as trusts or limited liability partnerships, or make it easier to gift property over time. The owner can make the gifts without having to record new deeds at the registry of deeds. Typically, a realty trust will refer to a schedule of beneficiaries which lists the true owners of the property. The trustees simply act on behalf of the beneficiary or beneficiaries listed on the schedule, which is not recorded at the registry of deeds. Since the trustees must act at the behest of the beneficiaries, these trusts are often called “nominee” realty trusts.
If in your case, the schedule lists you and your wife, then the property will be subject to probate when the second of you passes away. You could change the beneficiaries to your children now, but doing so could have adverse tax consequences and mean that you and your wife would give up ownership and control. The best solution may be to execute a revocable trust for the benefit of you and your wife during your lives and for the benefit of your children after you’re both gone without passing through probate. The revocable trust would become the beneficiary of the realty trust.
But that’s just one idea. I’d need to know more about what you and your wife mean by “access.” I’d recommend sitting down with a local estate planning or real estate attorney to completely understand the options and their implications before choosing the one that best fits your goals.