So, you’re ready to begin estate planning and you have a few questions, right? One of the most common questions estate planning attorneys hear is how should a home be passed to offspring? There are a few options.
First, you could do no estate planning. With no estate planning, your home will be tied up in a probate process upon your death and state law controls who ultimately receives the home. If you choose this option, your home will become a probate asset upon your death. A probate asset is property that is subject to a court process before it can be passed to heirs. If you do not choose your heirs in a will, your home will pass to people designated by state law. Typically this means your home will go to your kids (if you have no surviving spouse) and descendants first. If there are none, then it will go to your parents if they are still living, and then to any siblings.
Create a Will
Second, you could devise your home in a will. Creating a will to devise your property is better than doing nothing. The upside to creating a will is that you get to decide how your property is distributed, rather than state law deciding. The downside to doing a will without anything else is that your home will still become a probate asset upon your death. This means that a court process is still needed before your home can be passed to who you named in your will.
Third, in addition to creating a will, you could do Transfer on Death Deed (commonly known as a Beneficiary Deed) if your state allows. A Beneficiary Deed gives you the best of both worlds. You can designate who receives your home and you can avoid probate upon your passing.
Create a Trust
Fourth, in addition to creating a will, you can put your home in a trust. A trust is an arrangement whereby a person holds property for the good of one or more beneficiaries. If you put your home in a trust, the trust will hold title to your home, with you as the trustee who controls the property in a revocable trust. Upon your passing, the successor trustee named in your trust can distribute your home to whoever you named in the trust to receive it. A trust also gives you the best of both worlds. You can designate who receives your home and you can avoid probate upon your passing.
Talk with an estate planning lawyer, like an estate planning lawyer in Belgrade, MT, to determine which option best meets your needs.
Thanks to Silverman Law Office, PLLC for their insight into leaving property behind for your children.