FAQ: Estate Planning Guide for Real Estate Owners
Estate planning is something that everyone should think about—because there is no “one size fits all” version of estate planning. A number of factors can complicate your estate planning efforts, starting with the ownership of real estate. At Singh Law Firm, we get a lot of questions about what estate planning looks like for real estate owners; the best way to discuss your particular needs is to contact us directly and set up a consultation, but in the meantime, here are a few answers to common inquiries.
Commonly Asked Questions About Estate Planning for Real Estate Owners
Should I include real estate in my will?
This is the most obvious question, and the answer is pretty simple: Estate planning should always begin with a will, which is where you list your assets and describe how you would like each one to be distributed upon your death (i.e., who gets what). This should definitely include any real estate that you own.
What about real estate trusts?
Including real estate assets in your will is an important start, but it’s not always enough to keep your assets out of probate. The probate process can be long and frustrating for your beneficiaries and it may also bring them some legal expenses. By using a trust, you can generally avoid your assets going into probate. Ask our attorneys for specific information about real estate trusts.
How can real estate assets be split among multiple beneficiaries?
This is a common concern among real estate owners. Imagine this scenario: You own one property but you have three children to whom you want to leave a legacy. Determining what’s fair, prudent, and likely to avoid family rivalries can be challenging, but there are a few options available to you:
- First, you should always talk to your beneficiaries and ask what they want. You may assume all three children want the piece of property when in fact only one of them has any interest in living there/maintaining it. This can clarify your decision making.
- There are usually options available to bequeath the real estate listing to multiple beneficiaries, allowing them to have joint ownership of it, though doing so can invite some complications.
- Another option is to liquidate the asset; you can specify in your estate plan that the property is to be sold upon your death, the profits distributed equally among your beneficiaries.
- There are other ways to ensure that you are providing assets of equal value to your beneficiaries. In the hypothetical scenario above, maybe the property owner leaves the real estate to one child and leaves the other two children financial assets of comparable value.
These are just a few of the solutions that are available; to discuss further options, reach out to your estate planning lawyer.
What about taxes?
When you leave a real estate asset to someone, you want them to receive its full value and worth; but, if your beneficiary ends up paying copious taxes, it can eat away at the real value of your estate.
That’s what makes tax planning such an important part of the estate planning conversation. For example, with certain trusts, you can actually have the real estate considered separately from the estate, meaning there is no liability for federal estate taxes.
Another option is to name another joint owner of the property now, before you die; then, upon your death, the property can just transfer to that individual without worries over probate or estate tax.
Where should I begin with estate planning?
Real estate owners face some complicated needs when it comes to their estate planning, and we’ve really just scratched the surface here. The first step should be meeting with an estate planning lawyer to talk about your specific goals, and to learn about some of the options available to you.
At Singh Law Firm, our attorneys can help you understand real estate within the broader context of your estate plan. We want to help you provide your family members with a real legacy without worry about things like taxes or the probate process. Contact Singh Law Firm today.
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