If you are on the fence about whether setting up a Trust and putting your property in a Trust, is the right path for you, you can now add “being exempt from affirming that your house meets current fire safety codes” to the pros column.
In our Practice, we help clients decide if setting up a Trust is right for them, handle residential real estate closings (which have been keeping us very busy in this pandemic market), and assist families with the probate process after a loved one passes away.
Being able to cover all angles of the process from Estate Planning to Probate and even Real Estate closings makes us uniquely qualified. While I am not the type of attorney who insists that everyone needs a Trust for Probate avoidance, I can definitely point out the benefits of putting property in a Trust.
Related Post: 3 Simple Benefits Of A Living Trust
There are some states where probate avoidance is a must, like the state I formerly practiced in – California – and the state where many of our Connecticut clients have second homes – Florida. And there are some reasons that Connecticut residents should avoid probate, but it is on a case-by-case basis.
In this pandemic market, however, where buyers have been overbidding and sweetening deals with 100% cash offers and no inspections, a seller who can quickly transfer title can take advantage of the market.
This is especially helpful when a family has listed a home that was once occupied by a now-deceased loved one. When the family is looking to sell a home that is no longer occupied, they usually want to sell quickly to minimize the expenses of the home.
If the homeowner did not execute a Revocable Trust for Probate avoidance, then the transfer usually has to follow the Probate process, which can delay the listing of the property by at least 4-6 weeks, while the family waits for the Probate Court to appoint a fiduciary. This waiting period was generally not problematic in our former buyer’s market when it took just as long or longer to find a buyer.
Side note, even if you are named the Executor in the Last Will and Testament, that does not give you authority to list and sell the decedent’s home; you must first be appointed by the Court.
With interest rates rising, the housing market seems to have cooled a bit, but despite that, there is a new law that goes into effect on October 1 that may make putting your property in a trust a little bit sweeter.
What Is The Smoke and Carbon Monoxide Detector Statute and How Does it Affect The Closing Process?
On October 1, 2022, amendments to Section 29-453 of the Connecticut General Statues will go into effect. This statute, which originally became effective in July of 2014, concerns smoke and carbon monoxide detectors in residential homes.
Under the current law which has been in effect for the past eight years, a seller of real estate built before 2005 is required to sign an Affidavit Concerning Smoke and Carbon Monoxide Detectors, which states that the property has smoke detectors and a carbon monoxide detector in working order. The detectors could be hard-wired or battery-operated. If the seller could not, or chose not to, affirm these facts, then the seller had to provide the buyer with a credit of $250.
Some sellers and their attorneys choose to provide the credit rather than risk the possible liability that a detector was not in working order, but many sellers do not want to give up the $250, so easily and would purchase a carbon monoxide detector or smoke detectors to meet the requirements of the law.
Next month, the law changes and puts a greater burden on sellers. For all dwellings completed after 1976, the detectors must be hard-wired into the electrical system. Further, for dwellings completed after 1989, the alarms must be interconnected so that when one alarm goes off, it triggers the others.
These are all great safety measures and follow the current Fire Safety Codes, but they could also be costly changes. Further, the new law states that the detectors must comply with the current First Safety code, the details of which most sellers would not know. For these reasons, I will be advising my sellers to pay the credit.
How Does Putting Your Property In a Trust Help?
Well, the revisions to the law did not change the exemptions that were included in the 2014 law. The affidavit is not required when the seller is an Executor, Administrator, Conservator, or Trustee. So if your home is owned by your Trust, and you are selling as the Trustee of the Trust, you do not have to execute the affidavit or pay the $250 credit.
Obviously preparing and funding a Trust is going to cost more than $250, but if you are on the fence about whether to execute a Trust for probate avoidance and put your property in a Trust, this may give you a little more incentive to do so.
Joan Reed Wilson Esq. – Managing Partner
Practices in the areas of estate planning, elder law, Medicaid planning, conservatorships, probate and trust administration, and real estate. Admitted to practice in the States of Connecticut and California, she is the President-elect of the CT Chapter of the National Academy of Elder Law Attorneys (NAELA), an active member of the Elder Law Section of the Connecticut Bar Association, accredited with the PLAN of CT for Pooled Trusts, with the Veteran’s Administration to assist clients with obtaining Aid & Attendance benefits for long-term care needs and with the Agency on Aging’s CareLink Network.