After efforts to repay a deceased individual’s creditors, their remaining property will pass to their closest family members, including spouses and children, unless they have designated others as the beneficiaries of this property.
Real property, including the home where someone lived, will often be the biggest asset that they will pass to their family members via their estate plan. Therefore, it is also the asset most likely to cause conflict along estate beneficiaries. There are many ways for someone who is thinking about their legacy and their loved ones to pass their home to others as part of their estate plan. These are some of the most common strategies for managing real property when someone dies.
1. Addressing the home in a will
The easiest means of arranging for real property to transfer to the next generation likely includes designating a specific beneficiary to inherit the home when someone dies. Including real property in a will makes it easy for the testator to either grant the property to a specific family member or to leave instructions for their executor to sell the property so that each of their family members will receive a portion of its value.
2. Executing a deed to add a co-owner
Older adults preparing for retirement, especially those who will live with family members, frequently choose to change the ownership paperwork for their homes. Holding title as joint tenants with rights of survivorship can be a way for two people to share an interest in a property without the testator giving up their right to live there or their control over the property.
When either owner dies, the other will automatically receive the deceased party’s share of equity. Executing a new deed can be a very efficient way for someone to protect the right of a certain person to assume control over the property when they die.
3. Transferring the home to a trust
There are multiple different kinds of trusts that people can include in their estate plans. Although the type of trust someone employs may influence the exact benefits they derive from their arrangements, a trust will typically give someone control over who can live in and sell the home during their life and after their death.
It can protect someone’s primary residence from creditor claims and estate claims after they die. A trust could also help someone more quickly qualify for Medicaid when they are older and need to move into a nursing home.
The value of someone’s real property, their financial circumstances at the time of estate planning and their family relationships may all influence the solutions that could prove to be the best options for someone’s estate plan. Applying a thoughtful solution for the most valuable property someone owns is crucial for the best outcome during probate proceedings. Seeking legal guidance can help someone to effectively identify what those solutions might be.