Looking for some savy advice about moving a house to a trust!

Investor · NY/CO/OH · Member since 2022 · 21 posts · 14 votes

Long story short my mother has worked as a hair dresser for 36 yrs and its time to retire. Social security is a joke but we have one card to play. Based in NY her primary residence of 40 years has appreciated exponentially. We want her to move the house to a trust, sell it, and then put that money in a some kind of high yield savings account. Our hopes is that combined with the interest payments and social security she can live comfortably with my bother in his in-law suit. Has anyone done something similar? or have any savy advice that I can look into? thanks BP fam!

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Denver McClurePro Member

Financial Advisor · Dallas, TX · Member since 2018 · 659 posts · 479 votes

Might want to chat with @Jeff Nash about this. He has experience with Trusts and can give you a perspective on the tax savings/implications here.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3y
Quote from @Christopher Young:

Long story short my mother has worked as a hair dresser for 36 yrs and its time to retire. Social security is a joke but we have one card to play. Based in NY her primary residence of 40 years has appreciated exponentially. We want her to move the house to a trust, sell it, and then put that money in a some kind of high yield savings account. Our hopes is that combined with the interest payments and social security she can live comfortably with my bother in his in-law suit. Has anyone done something similar? or have any savy advice that I can look into? thanks BP fam!

Why would you move it to a trust if you are gonna sell it? If she was not gonna sell it then move it to a trust, so you can skip the probate process. Moving it to a trust doesnt seem to provide any benefit that I see.
What were you thinking (and what am i missing)
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Denver McClurePro Member
Financial Advisor · Dallas, TX · Member since 2018 · 659 posts · 479 votes
3y
Might want to chat with @Jeff Nash about this. He has experience with Trusts and can give you a perspective on the tax savings/implications here.
[email protected]
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Christopher YoungPro Member
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Investor · NY/CO/OH · Member since 2022 · 21 posts · 14 votes
3y
Quote from @Chris Seveney:

Quote from @Christopher Young:

Long story short my mother has worked as a hair dresser for 36 yrs and its time to retire. Social security is a joke but we have one card to play. Based in NY her primary residence of 40 years has appreciated exponentially. We want her to move the house to a trust, sell it, and then put that money in a some kind of high yield savings account. Our hopes is that combined with the interest payments and social security she can live comfortably with my bother in his in-law suit. Has anyone done something similar? or have any savy advice that I can look into? thanks BP fam!

Why would you move it to a trust if you are gonna sell it? If she was not gonna sell it then move it to a trust, so you can skip the probate process. Moving it to a trust doesnt seem to provide any benefit that I see.
What were you thinking (and what am i missing)

to avoid capital gains taxes
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Clark Peterson
Lender · Catskills / Hudson Valley / Greater NYC Metro · Member since 2023 · 24 posts · 11 votes
3y
Quote from @Christopher Young:

Quote from @Chris Seveney:

Quote from @Christopher Young:

Long story short my mother has worked as a hair dresser for 36 yrs and its time to retire. Social security is a joke but we have one card to play. Based in NY her primary residence of 40 years has appreciated exponentially. We want her to move the house to a trust, sell it, and then put that money in a some kind of high yield savings account. Our hopes is that combined with the interest payments and social security she can live comfortably with my bother in his in-law suit. Has anyone done something similar? or have any savy advice that I can look into? thanks BP fam!

Why would you move it to a trust if you are gonna sell it? If she was not gonna sell it then move it to a trust, so you can skip the probate process. Moving it to a trust doesnt seem to provide any benefit that I see.
What were you thinking (and what am i missing)

to avoid capital gains taxes

Capital gains exclusion on primary residences is $500k if married and $250k if an individual. There are also certain other exclusions that can be applied as well which can be found here: https://www.irs.gov/publicatio...
Note that if the home is passed on as part of an estate the heirs acquire the home with "stepped up basis" meaning they owe no taxes on the accumulated capital gains since the home was purchased.
I'm skeptical that the transfer of the trust is going to save you any taxes.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
3y
Trusts have higher taxes than individuals if the income is held within the trust...

You should consult a CPA before doing anything.
[email protected]917-280-8544
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