Why People Set Up a Residence Trust

A residence trust is designed to ensure your partner can continue living in your home after you pass away. This is especially useful when:

• You are in a committed, long-term relationship but do not want to get married.

• You want your partner to stay in the home without giving them full ownership.

• You want the home to eventually pass to your children or other heirs.

• You want clarity and fairness—without creating family conflict later.

Without a residence trust, your partner could be forced to move out, face disagreements with your children, or lose the home entirely.

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Narrow vs. Broad Residence Trusts: How to Structure the Plan

One of the first decisions you’ll make is whether the trust will be narrow or broad.

A narrow residence trust

This type names a specific property—usually your current home.
If you move later, the new property won’t automatically be covered, and your partner may not receive anything.

A broad residence trust

This option covers whichever home you own at your death (typically the property receiving the homestead tax credit).
This gives you flexibility if you move or downsize later in life.

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What About the Mortgage?

If the home still has a mortgage, you’ll need to be clear about what happens next:

• Should the mortgage be paid off before the home transfers into the trust?

• Should your partner be responsible for refinancing or making payments?

Clear instructions help prevent confusion, stress, and disputes after your death.

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How Long Does the Residence Trust Last?

This is one of the most important parts of a residence trust—and one of the most overlooked.

You must decide whether:

• Your partner may live in the home for their entire lifetime,

• OR only as long as they physically occupy the home.

Key scenarios to consider:

• If your partner moves to assisted living, does the home get sold and the proceeds go to your children?

• Can the partner sell the home and buy a new one using the trust?

• When the trust ends, who inherits the property or the proceeds?

Most people choose to let the partner live there during their lifetime, with the property ultimately returning to the children. But the trust can be drafted more broadly or more restrictively depending on your wishes.

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Household Possessions: Who Gets What?

When couples live together, household items tend to blend. That can create conflict if your partner and your family disagree about who owns what.

A practical solution is:

• By default: household possessions stay with the partner

• Exceptions: family heirlooms listed in a written memorandum (furniture, jewelry, artwork, etc.)

This prevents unnecessary fighting and keeps your estate administration smooth.

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What If You Break Up?

This is a surprisingly common concern.

Technically, you can draft a trust that ends if you’re no longer together, but breakup terms can be subjective. Instead, the best practice is simple:

If you break up, update your estate plan immediately.
This removes ambiguity and prevents legal disputes.

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A Residence Trust Can Protect Both Your Partner and Your Family

A residence trust is a powerful tool that allows you to:

• Give your partner security and stability

• Preserve your home for your children

• Avoid family conflict after you’re gone

• Control how your property is used and distributed

If you live with a partner and want to ensure they’re protected without compromising your children’s inheritance, a residence trust can be an excellent solution.

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Frequently Asked Questions

1. Can my partner live in the home for life under a residence trust?

Yes. You can allow lifetime occupancy or set a more limited timeframe—your trust can be customized.

2. Do I have to include money in the trust for home expenses?

No, but many clients choose to. Adding “household funds” can prevent financial strain and reduce disputes.

3. What happens to the home after my partner dies?

Most residence trusts pass the home (or sale proceeds) to the homeowner’s children, but you can choose any beneficiaries you wish.

Author

Claire creates wills and trusts which provide security and peace of mind. She compassionately listens to her clients’ dreams, goals, and fears and then fashions plans that best meet their needs. It is important to Claire that her clients understand different options and make decisions that are right for them. She loves to educate clients by drawing out complicated concepts.

Come visit us! Conveniently located in Rochester, Minnesota.