While you’re working on your estate plan, one of the major topics that will come up is what to do with your real estate. There are a few different ways that you can handle real estate in your estate plan. You can will it away to a beneficiary, set it up in a trust or give it away during your lifetime. You may have other options, too.
The most common way to leave a home to one of your heirs is through a will. However, you may want to look into a trust. With an irrevocable trust, you get some additional benefits as well as being able to pass the home on to the person of your choice. What are those benefits? They include:
- Protection against creditors.
- Being able to reduce the value of your estate for Medicaid planning.
- Being able to avoid probate.
- Preventing will contests that could change who the home goes to.
If you want to pass your home on to your heirs sooner, then you may want to look into options like:
- Selling your home to your children.
- Putting together a transfer-on-death deed.
- Gifting the property to your children or beneficiaries, although this can have tax implications.
All of these options are valuable to consider if you want to pass on your property.
How do you decide which option is right for your home?
The nice thing about working on your estate plan now is that you have an opportunity to look into how you want to pass on your property and when you want to do so. You have time to work through different scenarios and to see which may be best in terms of long-term protection of your assets. You can even work out which scenario will be taxed less or create less of a financial burden for beneficiaries.
Take the time to look into your real estate. Your attorney will go over different options that may work well in your circumstances, so you can protect the assets you have and make sure they pass on to the correct people later in your life.
