Your estate plan should include instructions for all of your most valuable assets. The home where you live may be worth more than anything else you possess, making it a crucial asset to handle properly when planning your estate.
Given the value of a home, testators need to be careful about the way that they transfer the property. For example, giving a loved one a quitclaim deed to record after you die may trigger massive taxes. What are some of the ways that people handle their homes when planning their estate?
They move the property into a trust
Have you remarried? If so, using a trust in your estate plan can be a good solution for handling your home. You may want your spouse to have the right to continue living in the house until they die. However, you may want the value of the home to pass to your children.
You don’t want your spouse to sell the house, leaving your children with very little inheritance. Putting the house in a trust can allow you to grant tenancy to certain people while ensuring that others will have the ultimate ownership rights for the property.
Changing the way you hold title to benefit another occupant
Whether you live with your spouse or a child who will serve as your caretaker as you age, you may want that other person to inherit your right to the property when you die. Changing the title by executing the deed so that you hold the property as joint tenants with rights of survivorship will make that transfer easy. Your spouse or child will simply inherit your share of interest in the property when you die without the delay of needing the home to pass through probate court first.
Selling the home for capital
Real estate is valuable, but the people that you love may already have their own homes. Trying to maintain a vacant property or rent it out to others could present a burden for your beneficiaries. If your loved ones would not want to assume tenancy over the property, you may want to leave instructions for the sale of your home during estate administration so that your beneficiaries can share in the proceeds from that sale.
Thinking about your biggest assets and closest loved ones can help you create a thorough estate plan.