Oftentimes, the home where someone lives is the single most significant financial asset in their name and the biggest contributor to their personal wealth. It therefore makes total sense that people worry about what may happen with the home where they live after they die.
The failure to create an estate plan might leave a home vulnerable to creditor claims or could lead to people fighting over the home after someone dies. The following are some of the ways that an individual can address a residence in their estate plan.
Changing title ahead of time
Some testators creating an estate plan already live with the person who should inherit the home. They may have a spouse who is likely to outlive them or may share their residents with a child who acts as their caregiver. It is possible to add other occupants of the home to its title to keep the home out of probate court after someone dies. In fact, it is possible to add someone else to title even if they do not actually reside at the property. Different types of vesting can work for homeowners in a variety of different circumstances.
Bequeathing the home to specific beneficiaries
Sometimes, testators do not feel comfortable granting an ownership interest to another party until after they die. They may use a will as a way to pass the property to one individual. Other times, a testator may want someone to live in the house without having control over it. They might use a trust or a more complex estate plan to give someone the right to live at the property indefinitely while transferring ownership to someone else. Trusts can also be a useful solution when the testator wants multiple people to share the ownership interest in the property, as might be the case if they treat what was once their cabin as their primary residence later in life.
Arranging for the sale of the property
If a testator’s children and other beneficiaries have achieved financial stability, they may recognize that none of their beneficiaries want to live in the home after they die. Instead of transferring the home itself to beneficiaries, they may arrange to sell it. That way, the personal representative of their estate can distribute home equity among beneficiaries according to their instructions. Each of these approaches can be viable solutions for people in different family and financial circumstances.
Exploring solutions for high-value assets can be beneficial for those reviewing or creating an estate plan. Plans that address high-value assets can maximize the impact that an estate has while diminishing the likelihood of beneficiaries fighting over that estate.