What are the Options for Homeowners Who Want to Leave Real Estate to their Heirs?
Homeowners who pass away before they decide and document what to do with their home risk leaving their families squabbling over what to do with the property and the potential for significant tax liability.
What are the options available for homeowners who want to leave real estate to their heirs with little to no hassle?
Place the property in a trust
A trust is an estate planning tool that helps people avoid the probate process, while also securing assets and property for beneficiaries. The person creating the trust is the “grantor.” When someone places assets and property in a trust, their appointed “trustee” will be in charge of and must manage the trust. The person who benefits from the trust is the “beneficiary.”
By placing property into a trust, ownership of the real estate is distributed to beneficiaries in a matter of days or weeks after the grantor has passed. Additionally, in the event of the grantor’s incapacity, the successor trustee can manage and take care of assets in the trust, including the home.
How does someone put their home in a trust?
With the help of an attorney, the first step is to create a trust, but creating a trust is only the first step. Funding a trust is the process of transferring assets to a trust account. To move an asset into a trust, the process usually involves the preparation of the trust followed by the recording of the property’s deed in the county property records.
A Lady Bird Deed is another option
A Lady Bird Deed is a type of deed that allows the creator to quickly transfer property to a named beneficiary without probate. A Lady Bird Deed is ideal for those who are leaving property to one beneficiary. Those with multiple properties and beneficiaries may wish to consider a trust.
Other options to consider
Listing your house in your will is another option, but this option does not avoid probate court. When a person dies and leaves a will, probate is required to distribute the contents of a will to beneficiaries. If a person does not have a will in place, his or her assets pass to certain family members per Michigan law. Homeowners may wish to transfer their property while they’re still alive; however, if an heir is sued or gets in other trouble, the property could be seized.
Help is available
If you would like to put your home or other assets into a trust, contact an estate planning attorney by calling 586-726-1000 or by visiting www.orlaw.com.