Estate planning for people who own real estate brings unique concerns to the forefront. Should you leave instructions to liquidate this asset after you pass away and distribute the profits to your loved ones, or will your beneficiaries receive the property itself? Will your loved ones have joint ownership of your property and need to make joint decisions about its management? If one of your beneficiaries is not interested in property ownership, what other assets should you leave to them to ensure that you treat your loved ones fairly?
The right legal strategy can address these concerns and create a plan that protects both your loved ones and your property.
Write a will, but consider other options as well.
While a will is the foundation of many estate plans, the value of the real estate you own may require a more comprehensive plan. Placing your real estate holdings in trust, for example, may provide for your loved ones and protect them from the burden of estate taxes. An attorney may be able to help you explore the documents that best suit your goals.
Speak to your loved ones about your wishes.
The property you own could provide your loved ones with support for years to come, but it could lead to conflict in the future if one of your loved ones has different plans. Discussing your property with your beneficiaries allows you to clarify your thoughts and address any questions that your beneficiaries may have about your property and its maintenance.
Consider potential complications.
When crafting your legacy, it is important to prepare for concerns that may arise in the future. If your loved ones often disagree, for example, joint ownership of a piece of real estate could lead to future conflict about maintenance or sale of the property. In this case, leaving the property to one of your beneficiaries or liquidating your assets and distributing the profits may be a better solution.
Plan for incapacitation.
If an illness or injury left you unable to make important decisions about your property and its care, who would make these decisions for you? You may want to consider establishing a power of attorney that would allow someone you trust to pay bills, pay your taxes, make investments and sell property on your behalf.
As a real estate owner, you will have unique concerns when estate planning. However, by carefully crafting your estate plan, you can prevent future conflict and protect your legacy.