Creating a trust in the state of Georgia is an important component of estate planning. Because a trustee might decide to sell real estate after creating a trust, many people are hesitant to establish one. The procedure for purchasing and selling property in a trust is straightforward if your estate plan contains a revocable trust or if you are thinking about including one in your estate plan.
The Role of Trusts in Real Estate Transactions in Georgia
A trust is a legal entity created for the purpose of holding and managing assets on behalf of beneficiaries. When it comes to real estate, trusts can serve various roles, such as:
- Revocable Living Trusts: Individuals often use revocable living trusts to manage their real estate during their lifetime. With a revocable trust, the grantor (the person who establishes the trust) retains control over the assets and can buy, sell, or manage the property as they see fit. This type of trust can simplify the transfer of real estate upon the grantor’s death, avoiding probate.
- Irrevocable Trusts: Irrevocable trusts are commonly used for estate tax planning and asset protection. Once assets, including real estate, are transferred into an irrevocable trust, the grantor typically relinquishes control over those assets. The trustee is responsible for managing the property, which can include buying, selling, and maintaining real estate on behalf of the beneficiaries.
Buying Real Estate with a Trust in Georgia
When using a trust to purchase real estate in Georgia, the trust itself is the legal entity that holds ownership of the property. The process typically involves the following steps:
- Create a Trust: Establish the trust, specifying its terms and the beneficiaries who will eventually benefit from the property.
- Fund the Trust: Transfer the funds necessary for the purchase into the trust. This can involve transferring money or, in the case of real estate, deeding the property into the trust’s name.
- Purchase the Property: The trustee, acting on behalf of the trust, enters into the real estate transaction as the buyer. All documents, including the purchase agreement and deed, should be in the name of the trust.
- Manage and Maintain the Property: The trustee is responsible for managing and maintaining the real estate on behalf of the trust and its beneficiaries.
Selling Real Estate with a Trust in Georgia
When selling real estate held in a trust, the process is similar:
- Authorize the Sale: The trust document should contain language that authorizes the trustee to sell property. The beneficiaries typically do not need to be directly involved in the sale decision.
- List and Sell the Property: The trustee lists the property for sale and handles all aspects of the transaction, including negotiating offers, signing contracts, and overseeing the closing.
- Distribute Proceeds: After the sale is complete, the proceeds are typically held in the trust, and the trustee distributes them according to the trust’s terms.
Get Help Today & Consult with an Estate Planning Attorney
In Georgia, trusts can indeed purchase and sell property, providing a flexible and efficient means for managing real estate within an estate plan or for other financial purposes. However, it is crucial to understand that the specific rules and requirements governing trusts can be complex, so it is advisable to work with an experienced estate planning attorney in Georgia. We will offer you the support and guidance you need at Hurban Law.
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