An estate plan manages your financial and property assets upon your death. Creating an estate plan is the best way to protect you and your beneficiaries’ best interests. Here are the top three things you need to know about including your home and vacation properties in your estate plan.
Is an estate plan necessary to pass down real property?
No, an estate plan isn’t required to pass down real property. The intestate statute will transfer your property and your other assets to your closest relatives. However, if you want your land to go to a specific person, you’ll need a will or a transfer on death deed. With one of these devicesl, you’ll have the option to name nieces, nephews, siblings, friends, or charitable organizations as beneficiaries of your properties. Without a will or a transfer on death deed, your real property will be sold, your heirs determined by probate law, and the sale proceeds distributed accordingly.
What’s the difference between a trust and a will when it comes to handling my real property?
Your will outlines your final wishes and only goes into effect after you die. A living trust is different in that it is a legal document that assigns someone to manage your assets while you are still alive. There are also testamentary trusts, which are created by your will for the benefit of someone else. Both living and testamentary trusts can include real property. Many people choose to put their wishes in writing so their children or other beneficiaries do not have to grapple with asset allocation amidst the grieving process. It’s imperative to have a conversation about your estate plans with your loved ones to avoid confusion and bitter familial conflicts down the road.
Can I add my vacation property to my estate plan?
For many families, vacation homes hold substantial emotional value. Ownership of a vacation home by a trust or a limited liability company (LLC) can protect the asset and ease the transfer of the property to the next generation. With a trust or LLC, you can create a rule book for how your vacation home should be used and maintained. Additionally, you can specify what is to happen to the property after you pass away. A trust or LLC is an excellent solution for ensuring your vacation home stays in the family for many generations to come. Additionally, if an LLC owns your vacation home, it will provide limited liability from outside claims. If a judgment is entered against the LLC, the creditor is limited to the LLC’s holdings and cannot look to your personal accounts or property. If a judgment is filed against you for a claim unrelated to the LLC, it will be difficult for a creditor to force a sale of the vacation home.
If you’re ready to take the next step in formulating your estate plan, reach out to the team at Sjoberg & Tebelius. With our professional guidance, you can be confident you will have comprehensive protection over your real estate property and assets. If you have questions, call Sjoberg & Tebelius, P.A. 651-738-3433, or contact us through our online form.