Owning a home and other real estate has long been a part of the American dream. Millions of Americans use real estate as an investment tool, and a trust as a way to help protect and ensure the future of their family and loved ones. This method can be very successful to help secure the financial stability for your family, and it is essential that your real estate investments are coupled with a detailed and tailored estate plan. An estate plan can take real estate into account in several different ways.
One common tool for real estate and estate plans is a trust. With a trust, you transfer your asset (in this case your real estate) to the trust. The trust documents you execute will name a trustee and a beneficiary. The initial trust is usually you. The trustee is responsible for administering your trust in accordance with your wishes. The beneficiary is the person you designate to receive the benefits of the trust. There are wide varieties of trusts, most of which allow you to name yourself as both trustee and beneficiary. There are also distinct tax planning opportunities in trusts. In some cases, transferring your real estate to a trust can mean that your real estate will pass outside of probate. If you have substantial real estate assets, with proper tax planning, this can reduce the probability that your beneficiaries and heirs will be burdened by estate taxes.
Another way to keep your real estate in mind when constructing your estate plan is changing the way your real estate is titled. Having your home titled as “joint tenant with rights of survivorship” is a common way to accomplish this. This method is typical and popular with married couples. Having real estate titled this way allows the property interest you hold in a home to immediately pass to the joint tenant without having to go to through probate or extra steps. One downside to this method is that titling real estate as a joint tenant with another person gives him or her immediate rights to the real estate, even before you pass away. A risk in putting title in joint tenancy is that your joint tenant may become incapacitated, or involved with the wrong people who may take advantage or him or her.
If you own real estate or other property, you need an estate plan. Call us today to talk about your family and what we can do.
