Estate Planning for Your Home

You have a house, you pay the mortgage, keep up on repairs, make improvements, and if all goes well, someday you will pay it off. But what happens to your home if something happens to you?  What happens to your family (who may live in the home)?  Growing old is part of life.  There may come a time when you are no longer living in your house.  In that case, your house needs to be transferred to your spouse, your children, other family members or other loved ones.  How can you prepare for this transition?

An experienced estate planning attorney can help you figure out what the best option for your property will be. You may need a will, a TODI, a land trust, or a revocable living trust. You may need something else.  No matter which option you choose, you should discuss your plans with your family.

A will is a simple method to pass your home along to the next person. A will allows you to outline exactly how you want your assets to be divided and designate beneficiaries and an executor to manage the process after you are gone. However, the downside to a will is that after your death, your family will have to go through lengthy and costly probate proceedings at court in order to have the home transferred.  Probate is also public, as it’s through the courts.

A transfer on death instrument (TODI) is a document that allows you to transfer real estate to a beneficiary after your death without having to go through probate. The property is immediately available to the beneficiary upon your passing. It also allows the beneficiary to avoid the costs, time, and stress of the probate process.  If all you care about is one particular piece of property, and you are not worried about transferring other assets also, a TODI would be a good fit.

Land trusts come in various forms – there are one that are prepared by attorneys, others that are held through banks, and others through title companies.  You can designate beneficiaries and avoid probate through a land trust also.  Most land trusts come with setup fees, closing fees, and annual fees.  Depending on your situation though, they might be a good fit.

A revocable living trust allows you to transfer your assets to a trust while still maintaining control over them during your lifetime.  You put your home in the trust now, then when you die, your trust still lives, it just has a new trustee.  The trustee can distribute your property according to your wishes as identified in your trust.  A living trust also allows your loved ones to avoid the probate process.

While these are the most common options, there are other possibilities too.  Which of these is the best fit for you?  A qualified estate planning attorney can advise you.  Your home may be the most valuable asset that you have.  Make sure your home, and your loved ones, are protected.