Real Estate Planning: A Guide for Beginners
It’s no big secret. The word ‘real estate’ tends to make most of us think of homes put on sale by others but never your own. But that’s what it actually is. Consider everything you own, be it in your junk drawer or your checking account, it’s all your own estate.
This is crucial to understand when we talk about real estate planning. Estate planning is helpful to everyone, especially when you start to accumulate and grow your wealth. If you own property, find out how you can use real estate planning as a critical tool to ensure that your legacy remains.
About Real Estate Planning
No one lives forever. Keeping this in mind, you need to plan for who will be eligible for receiving your estate when you pass on. Its certainly not a fun thing to look forward to, but real estate planning can ensure that your hard-earned assets go to those who deserve it. It can be individuals or even organizations, and the best part is that you get to choose.
Make sure you consult with your lawyer, make arrangements in advance, and come up with specific instructions that lay out how your estate will be distributed and to whom. You can set the time and the process, and let the legal eagles take care of the rest. In fact, its good because doing so lets you avoid a protracted legal battle and avoid taxes that your heirs may otherwise have to pay.
How to Do It
Legally speaking, you have two options for bequeathing your property to other parties – via wills or living trusts.
Both of these can help you designate the beneficiaries for your place. However, wills and trusts differ crucially in their application. Despite this, many people normally make wills and living trusts both so that they can take the advantages each has to offer.
First, let us look at how will operate. A will gives you the option to state who will be the legal guardians for minors, something that a living trust is unable to do. Also, a will can contain details on how to resolve outstanding taxes and debts on your behalf.
Next, we consider a living trust. It is also known as a revocable trust since it can be changed at any time. It ensures that your property is not subject to rebate and taxes as it exchanges hands. In fact, it is also immune to any legal challenges by a court. The only relevance that the court has, in this case, is to ensure that a deceased person’s property has been distributed according to the terms they have set in their trust and that too when the creditors have been paid.
A will goes public when the person in whose name it has been made passes away. Properties that have been listed in a will are still open to claims and the probate court. These are often lengthy processes by themselves. But if a living trust comes into play, they are private and can enable people to pass down their property while they are still alive. Plus, it’s not open to any challenges from the court.
Things to Do When Considering Real Estate Planning
Make sure that you:
- Hire an attorney that can help you explain the best options to pass down the property.
- Let it be known what happens when you pass away. This can be related to your funeral arrangements as well as burial wishes.
- Can be cared for in case you become disabled.
- Give out instructions for transfer of business and assets.
- Designate guardians for minors.
- Arrange how documents for real estate should to transferred to your loved ones or businesses.
- Take out insurance plans that can pay off your debts and liabilities in case of your death.