What are the risks of purchasing a home that is in a trust?

Posted by Techyscouts | Posted on 10/10/2023
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    • Typically, a home that is in a trust for which you are neither grantor nor owner to start with poses some very complicated legal issues. A Los Angeles trust real estate broker, Michael Millea, would advise you against it except under the best of circumstances. He can also help you figure out if a home in trust is a smart investment based on any gains you might acquire.

     

    Risk #1: A Home in Trust Stays in Trust

    An owner of a home puts the home in a trust to protect it against the probate process and hopefully reduce taxes on the home. A beneficiary is the person to whom the house will go when the owner passes or the person who will inherit the home via a living trust. Trying to buy a home that’s in trust runs many risks.

     

    Risk #2: You Could Lose Your Investment

    Buying a home in trust means that there is more than just the owner or previous owners involved here. The house is not completely free and clear for you to own. In a sense, you are buying some rights to the property, but it isn’t fully yours.

    Simply put, anyone who has any ties to the house and property can legally claim it and revoke your purchase. Anything you had put into fixing it up or making it look nice is lost. More often than not, you won’t get much, if any, of your money back.

     

    A Revocable Trust Is Good News…Sort Of

    If the house in question is in a revocable trust, you may be able to convince the owner or the beneficiary to sell and let go. The owner would revoke the rights of the property to any beneficiary with the intent to release the house for sale to you. However, the intended beneficiary could contest this in court and you would be at a loss if the judge decides in favor of the beneficiary.

    An irrevocable trust is not good in terms of an investment as the beneficiary has rights to the property in near perpetuity. This trust cannot be changed or revoked, which means you’re buying a property that could go through years of courtroom drama before it becomes fully and legally yours. A conservatorship real estate agent in Los Angeles would not be able to break the conservatorship without taking it to court.

    If you’re ready to contact a Los Angeles trust real estate broker, reach out to Michael Millea, a conservatorship real estate agent in Los Angeles who can explain all of the above.

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