Lake County News, California – Estate Planning: The House Trust

Dennis Fordham. Courtesy photo.

A residence can be kept in custody for the benefit of one or more beneficiaries after the death of the owner.

In California, a trust can hold real estate for up to ninety years or for a period ending no later than 21 years after the death of a person who was alive when the property owner died (if the trust is incorporated). .

Let’s discuss when, why, and how to use the so-called “house trustee,” so named because his main asset is a residence.

First, consider a second marriage with stepchildren in which the couple lives in an apartment owned by only one spouse.

The spouse who owns the apartment wants to allow the other (surviving) spouse to continue living in an apartment, but wants to ensure that the apartment ultimately goes to their own children.

Second, parents should be considered who wish to keep significant family residence for the common benefit of several children after their death.

In the first (second marriage) scenario, the homeowner wants to protect the surviving spouse from moving out of the home.

The spouse also wants to ensure that if the surviving spouse dies (or moves out), their children will ultimately benefit from the place of residence prior to the second marriage.

The house trustee regulates the rights and obligations of the beneficiary spouse and future beneficiaries.

For example, the spouse can be granted rent-free use of the home for life, but must pay insurance, taxes, maintenance, and utilities for the home while living in the home.

The spouse can also ask the trustee to sell the apartment and use the proceeds to buy another apartment; this would help if the spouse decides to downsize or move.

If the surviving spouse dies or fails to perform their duties, the trust will expire and the remaining property of the trust will be distributed to the children of the spouse who owned the home.

In the second scenario, parents want the benefits and burdens of maintaining residence to be shared among several children (and their families).

The house foundation looks at how several beneficiaries share the apartment over the calendar year, what obligations the children (and their families) have for the maintenance of the apartment and for each other and how the many costs for owning the house are shared.

The structure of the household contents provisions varies depending on the family situation and objectives. In all cases, it enables a trustee (or co-trustee) to manage the home, enforce regulations and avoid direct distribution or sale of the home after the death of the spouse who owns the home.

It also provides bankruptcy protection for the home against most creditor claims related to the beneficiaries’ personal debts.

Otherwise, the direct distribution can lead to the house being sold, being claimed by a beneficiary’s own creditors or not being used as intended.

The foregoing is a limited and simplified discussion of a larger and fact-driven topic. It is not legal advice. Get advice from a lawyer.

Dennis A. Fordham, Attorney at Law, is a certified estate planning, estate and trust law specialist. His office is located at 870 S. Main St., Lakeport, California. He can be reached at This email address is being protected from spam bots! You need JavaScript enabled to view it. and 707-263-3235.

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