It can be complicated to put real estate into your estate plan to pass on to your loved ones. But it’s also true that your real property may comprise some of the most valuable and expensive assets that you own. You certainly need to know how to pass this on to the next generation.
It’s also worth noting that different types of real estate will require different plans and decision making. A cabin or a vacation home may be addressed a bit differently than a longtime family home or the office building that houses your business, for example. Below are a few tips to help you get started.
Make it a family conversation
One thing that can be beneficial is simply to talk to everyone and get their input. You want to know what your heirs expect and what they’re counting on.
For instance, if all of your heirs are interested in jointly owning a piece of property, then you have to figure out how to divide that ownership between them. However, it may be less complicated than you assume if some of your heirs are not interested in that ownership at all, but would rather receive different assets instead.
Consider the financial side
You also want to think about what the financial side of this gift is going to look like for your heirs. Are they going to need to pay taxes or transaction costs? They will certainly need to take on the costs of upkeep, maintenance and utilities. Is the property fully paid off or is money still owed on the mortgage? Ironing out all these details can make things go smoothly.
Look into all of your options
Once you decide what your goals are and who is going to inherit each piece of real estate, then it’s time to figure out how to make a plan that accomplishes that goal. You do have a lot of different options. These include transferring the deed, setting the property up to transfer upon death, putting the property into a revocable trust or simply listing the property in your will.
The option that works best for you is going to depend on the unique factors that apply only to your situation. Make sure you know what steps to take and how you can create the plan that is going to be ideal for you and your family.