Passing real estate to beneficiaries can be more complicated than you might think. If you own property, there are several steps you must take in order to ensure your property passes down to your chosen beneficiaries. In general, real estate will go through the probate process, but there are a couple of ways to avoid probate if you are looking into transferring real estate as a part of your personal estate plan.
Option One: Transfer on Death Deeds
The first option for those who wish to avoid probate when transferring real estate is called the transfer on death deed. This deed allows a property owner to transfer his or her interest immediately upon death to whoever he or she names in the deed. The deed has to meet certain procedural requirements, like being in writing and being signed in the presence of a notary. Without these requirements met, the court might end up having the property pass through probate despite the property owner’s earnest attempt at avoiding it.
Option Two: Life Estate Deed
A life estate deed looks slightly different than a transfer on death deed. It gives legal title to the chosen beneficiary during the property owner’s lifetime. While the legal title no longer belongs to the original owner under this kind of deed, the owner does maintain the right to live on the property during his or her lifetime. This option can be a nice middle ground for estate planners, in that it makes the inheriting process easier for beneficiaries while still allowing them the benefit of residing on the land during their lifetime.
Of course, it is always an option to have the real estate pass through probate, although this can take anywhere from several months to a couple of years to complete. Probate can be frustrating for people to go through, and we advise that if it is possible to avoid the process, it’s better to organize your affairs on the front end so that your loved ones will benefit on the back end.
To find out if your individualized circumstances would allow for bypassing probate altogether, speak with an experienced estate planning attorney that can walk you through your options and help you figure out what might work for you.
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