Advice for Handling Real Estate During Estate Planning

Real estate is one of the most common items bequeathed in a will, but it is not quite as simple as you might think. According to property estate planning lawyers, you need to consider several important factors before deciding how to handle real estate.

Consider Options That Bypass Probate

Probate court can add extra hassle, fees, and confusion to property transfers. It is usually a good idea to bypass probate whenever possible. This will typically involve consulting with an estate planning lawyer and discussing your plans with your heirs.

Your first option is simply going ahead and adding your heir to the title. Many people go with a joint tenancy with a right of survivorship. This essentially grants your heir rights to use the property now along with sole rights to own the property when you pass away.

Another option that gives you more control is a trust. You can set up a qualified personal residence trust as a way of skipping probate and reducing tax costs. This trust leaves you responsible for the home and with the right to live in the home. However, when you die, ownership is transferred to your selected beneficiary.

Remember That Your Heirs May Have Added Expenses

It is important to remember that inherited property also comes with some responsibilities. If you do not want your heirs to end up selling the property to make ends meet, there are some things to keep in mind. Depending on the type of mortgage you have, your heirs may be required to pay the full balance of the mortgage on receipt of the property. If you do not want this to happen, you need to refinance the property in a way that allows your heirs to assume the mortgage upon your death.

There are all sorts of real estate inheritance taxes associated with inheriting property, including estate taxes and annual property taxes. If possible, it may be kind to leave your heirs with additional funds to handle the added tax burden. You can also meet with an estate planning lawyer to find ways of reducing these taxes.

Ensure That There Is Good Communication Between Joint Heirs

If your future heirs do not get along, it might be tempting to leave them property in the hopes that this will help them reconcile. While this might work with certain assets, with real estate, it’s a bad idea. Because of all the complexities of handling real estate, it is essential that all owners agree with each other.

Otherwise, you may end up with your children fighting about things like whether to sell the property or who gets to live in the property. It may be a good idea to sit down with your heirs in advance and make sure that everyone is on the same page. If there are still disagreements, you need to word your will carefully to ensure that your wishes are met.

Look at Nontraditional Estate Planning Options

When most people think of how to bequeath real estate, they picture passing on a beloved family home to an heir. However, remember that this idea is not your only option. There are all sorts of interesting and exciting things that you can do with property during estate planning.

If desired, you can ask that the proceeds of the property go to a specific charitable organization. You also have options like holding the property in trust for a certain amount of time. It is even possible to leave the house specifically to a nonprofit, which can then sell, rent, or use the home as needed. These sorts of unconventional options can ensure that your exact wishes are met after you pass.

The Knee Law Firm is here to help you navigate all the complexities of managing property during your estate planning. We are happy to assist with drafting wills, creating trusts, and more. Call our Hackensack firm at (201) 996-1200 or email us to set up your consultation.