Estate planning in the state of California is always an arduous process because it brings up strong emotions. No one wants to think about dying. However, if you are responsible, planning for what will happen to your estate after you’re gone is an absolute necessity. Some of these assets will include real estate. Real estate properties need to be given specific attention during the estate planning process.
Passing on real estate to heirs
Part of estate planning should include avoiding the probate process that happens in a court at all costs. When probate is decided by a judge, who gets what may be completely out of your hands. It may be the opposite of what you prefer. With real estate, there are some strategies you can use to make your preferences known. These include:
- outlining which heir or heirs will receive real estate in a will
- adding heirs to the deed to a home
- placing the real estate into a trust
Each of these has its own benefits and drawbacks. For example, simply adding your child to the deed to your house may cause issues if your child owes money to creditors. Transferring property to a trust may cause issues with the home insurance that must be addressed. Even so, probate will probably have an even worse outcome than any of those outlined above.
Keeping the property in the family
In certain cases, you may want to give the family home to a specific family member. However, you may be concerned with what will happen to it after that point. If you want to keep the house in the family and prevent it from simply being sold for a profit, you need to express that wish during your real estate planning. In this case, the best option is to place the property into either an inheritance trust or a dynasty trust.
You can then include rules for how access to the property will be managed and who will become beneficiaries after current beneficiaries die. This way, the home can be passed from generation to generation.
Overall, estate planning is important, and this is Moreso the case when it includes real estate. Take proactive steps to avoid leaving matters to chance when it comes to probate.