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What You Should Know About Real Estate Trusts in Mississippi

What You Should Know About Real Estate Trusts in Mississippi

When a loved one passes there are many details that must be handled. A trust, properly set up, will allow your heirs to endure the loss without adding the stress and pressures of dealing with all of the details of probating an estate. If you’re wealthy, then the alarming tax rate on gifts has likely been of concern as well. Taking action by pre-planning for the distribution of an estate allows peace for those you love who will be grieving and allows you peace of mind about the future and what will happen to your home. This also gives you control over how your assets will be managed or distributed, much like a will, but without the time and expense of probate. Placing your assets in a trust may also afford some legal protections, but it’s best to consult an attorney to properly structure your trust to ensure your assets are properly protected.

A trust transfers the title of ownership of the property out of your name and into the trust instrument or trust, under the care of a trustee and provides protections to your heirs. In Mississippi, we are a Homestead state, so you will want to consult with professionals about how to transfer your primary residence into the trust while still qualifying for the Homestead exemption on your property taxes. The alternative, for those unprepared, is being assaulted with the harsh realities of infighting among the heirs, probate court, estate taxes, and creditors at the door. Without the trust, your assets may sit for years without heirs taking the necessary action to probate your will or may even act outside the directive of the will and never probate your will. This will make the transfer of real estate and other assets nearly impossible. Talk with your heirs, select a responsible person that will take action and manage the trust and assets per your pre-planned trust.

We’ve been called in to consider purchasing family real estate that has been vacant, abandoned and in disrepair for years. Even when we can work through the process with the heirs, the property has fallen into such poor condition that we are unable to pay what the heirs feel the property should be worth. There may be liens on the property from homeowners associations, unpaid taxes and debts, many of which could have been resolved had they acted more quickly. They have lost their inheritance by their own inaction and neglect. Don’t let this happen with your assets!

If this isn’t the scenario you picture for yourself or your loved ones, here’s what you should know about real estate trusts in Mississippi.

Why Trusts Matter

Real estate deeded into a trust in Mississippi enables the beneficiaries to circumvent a great deal of paperwork and red tape during a challenging time by avoiding probate court. Probate can be a time-consuming and expensive process that can take several months or even years to conclude. The probate court also oversees the distribution of funds and ensures the repayment of any creditors against the decedent’s estate. A will sets out how the decedent wished for their trustee to distribute the assets. Without a will, the probate court determines the guidelines for distribution, usually set out by the state regarding inheritance and transference of the property title to the heirs. The heirs will receive the money at closing when and if the property sells

There is a lifetime exclusion on the transfer of gifts or estates which is adjusted annually for cost of living increases, in 2021 the amount was set at 11.7 million per individual and 23.4 million for couples. After your lifetime exclusion is met, if you’re married and your spouse is deceased, their exclusion rolls over to the survivor. If your home is under a trust, your heirs will realize gift tax savings,  ranging from 8 to 40 percent and generally paid by the gifter. The estate portion of this tax is applied upon death, and the trust may also protect the home from creditors. Another benefit of real estate trusts is that they are private transfers of wealth, not a matter of public record as with probate. 

Setting Up a Trust

Another thing you should know about real estate trusts in Mississippi is that there are dozens of structures, so it’s important that you take a careful examination of your options before deciding which type of trust suits your estate best. Your estate may hold more value than you realize, and there are benefits to creating a trust so that your estate can be inherited by your heirs. You’ll need to gather all of your important documents and take a realistic assessment of your assets. You may have a family member that you wish to ensure a supplemental income to, you can create a special needs trust that will fulfill your wishes. Perhaps you have a financially irresponsible family member, you can create a spendthrift trust that provides protection against their creditors as well as limiting access to the principal funds. When the trust is irrevocable, this means there will be no second-guessing your actions, there is no way to change your mind once your home or other assets have been transferred to the real estate trust. Irrevocable trusts, however, qualify your beneficiaries for estate tax exemption, in most cases, so the matter should be carefully weighed. 

Depending on how comfortable you feel with handling the process, you can create your own trust, or you may also select to use an online service to create your trust. However, we believe it’s best to seek professional legal counsel. There are many details, if not set up correctly, may create other issues. You’ll also need to decide who will be in charge of handling the estate as your successor trustee, you should speak with them and be certain they are willing to handle the responsibility. You’ll then have the trust documents created and finally transfer the deed into the real estate trust. you’ll hold title to the property in the trust as the trustee, which includes your name entered precisely as well as the date.

IM, LLC can help if you need to sell after the loss of a loved one. With very little time involved, IM, LLC wants to make the process as stressless as possible, making you a fair cash offer and closing in a matter of days or weeks. IM, LLC understands this is a difficult time and our experienced professionals are happy to answer any questions or concerns you may have. Send us a message or call IM, LLC at 601-401-6965.


IM, LLC is a local Mississippi investment company buying houses with a goal of rehabbing and returning the properties to the market for owner occupants. We do sell to other investors also but have a passion for creating affordable housing for those desiring ownership.

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