Those who own one or more properties are wise to consider how to protect these assets. Proper financial planning requires the owner to look at more than just the immediate. There are many strategies and legal tools that can help you to plan to preserve your wealth well into the future. This piece will dive into a few of the tools that are available through estate planning and how these tools impact real estate.
The first and less ideal option is to do nothing. A failure to put together a plan means state law will guide the transfer of the real estate. The legal term for this is to pass the property intestate, basically meaning that no plan was put into place to guide the transfer of the estate. This is less ideal because it takes away the ability to control the transfer, and the owner loses the chance to reduce tax obligations.
The next option is to include the property in a will. This provides the owner with control as they can dictate which beneficiary or beneficiaries receive this asset. Although the owner now has control the property will likely still transfer through the probate process. This is often public and can mean the details of your estate are now in the public domain.
The final option is to transfer the asset into a trust. Use of a trust can avoid the asset going through probate saving time and maintaining your privacy. Depending on how the trust is structured, it can also mean that your estate saves on tax obligations.
Tailor a plan to the estate
No two estates are the same. It is important to draft a plan with your specific estate in mind to better ensure the plan meets your expectations. You can help to better ensure a successful plan by seeking a legal team that will listen to your goals and help tailor a plan to reflect your wishes.