Real estate holdings are often a priority consideration during estate planning. People’s homes, cabins and investment properties may be among their most valuable assets. They may want to prevent their loved ones from fighting over those resources after they die. They may also want to protect them from creditor claims or other probate complications.
There are many ways for people to address real property in an estate plan. Some include their homes and other real property holdings in their wills. Others transfer their assets to trusts to allow for more nuanced management of those assets. Occasionally, people may choose to draft transfer-on-death deeds instead of adding real property to other estate planning documents.
What situations make a deed a reasonable estate planning inclusion?
The testator desires to retain control
Many people who use deeds as estate planning tools may record them while they are still alive and healthy. For example, they might change how they hold title to their property by adding a co-owner. People who hold title as joint tenants with rights of survivorship allow their co-tenants to assume their share of equity in the home after their passing.
However, people may not want to give up their control of the property or change their living arrangements in their golden years. They may also bristle at the idea of transferring the property to a trust, possibly because of the tax implications. In such scenarios, a transfer-on-death deed can be a simple solution.
There are concerns about probate issues
Maybe people worry that family members might challenge their will, leading to issues with the transfer of ownership or the property sitting vacant for months. People may also worry about creditor claims and other probate complications.
Those worried about their homes passing through probate court can execute a deed prior to their passing that the other party can then record after their death. Keeping real property holdings out of probate court can limit the possibility of conflict and can prevent a property from sitting vacant and its value decreasing as a result.
Reviewing different estate planning tools for valuable assets with a skilled legal team can help people create plans that truly meet their needs. Transfer on death deeds can be beneficial inclusions in many modern estate plans.