Thinking of putting your child’s name on your house deed? If that’s the person who will get the home after you pass in any case, it might seem sensible. And maybe it is, in certain circumstances. After all, probate can be time-consuming, and even contentious.
But before making this decision, do you know that your child is ready and willing to own a house? And at that point, have you consulted with an attorney and tax specialist about doing things this way? Here are some key issues to spot before obtaining professional guidance.
Maine will cover property taxes for homeowners aged 65+ who
have annual incomes under 40K. Thousands of homeowners — most of Maine’s
residents who receive Social Security benefits — will be eligible for the
benefit. The provision, LD 1638, takes effect on Oct. 18, 2021. There is a
catch for these eligible owners, though.
You might be wondering about that house or condo you’ve left
in your will. Often, after a homeowner passes on, the real property is sold
from the estate to pay off debts. But maybe you have a relative who would like
to have and keep your home.
For the sake of exploring the question, say you still owe a $50,000
mortgage balance when you pass on. Of course, you could leave your beneficiary
enough money to pay your loan off, if you are financially able to do so. Or you
could pay it off early yourself.
But if you need to pass the home on with a mortgage, can
your beneficiary just keep your house or condo, and pick up the monthly mortgage
payments where you left off? At least the next owner would have a head start —
inheriting your home equity, and just paying what’s left on the balance.
A home can go into an irrevocable trust. But giving
up control over a primary residence is not something most owners want to do.
The owner lets go of the “incidents of ownership” and the house goes under a separate
tax ID, with taxes filed by a trustee. The owner might continue living in the
home, but the house essentially becomes a vessel to hold property for the named
Any homeowner’s financial circumstances and goals can change,
and so can their relationships with potential beneficiaries: family, friends,
and charities. This is why an irrevocable trust makes sense only in rare
revocable (living) trust, you can assume the role of trustee, and stay in
control of your real estate during your lifetime.
After you pass away, your living trust becomes a substitute
for probate. This is especially helpful if your estate would otherwise face multiple
probate processes because you have real estate in several locations. It is also
a helpful way to pass a home along to children when they become old enough to
receive it, as the trust can direct a title change to a child at a specified
If you need to modify your estate plan due to children
growing up, a marriage or divorce, or other significant changes in the makeup
of your household, or because of your age or physical needs, you may. You can take
the asset out of the trust, assign a new trustee, change your beneficiaries, or
modify other terms of your trust.
For many homeowners, this is the best of both worlds in
estate planning. You keep full control during your life, but seamlessly transfer
the home on when you pass on, avoiding the time, expense, and stress of
probate. Still, there are plenty of things to know before making this decision,
as we’ll observe in this article.
homeowner should die intestate. In plain English: Every homeowner needs a will.
By now, everyone knows life is fragile. Nobody has forever and
a day to put an estate plan down in writing.
And if you do leave things hanging, and you do pass away without
a will, or without some combination of a will and other instruments to convey
property, you’ll leave assets to be distributed under the state’s intestacy
laws. States try to send everything to your closest relatives, and if you’re single
without children, the state will contact siblings and so on, and pass your
property to them. That might be OK with you. But if you’re like most homeowners,
you’d prefer to decide for yourself.
If you’re a parent, it’ll be hard for your family to agree
on what to do without your written guidance. You also need a will to bequeath
assets to non-family members or nonprofits. You need a will, too, to explain
why you are not giving your home to a close family member if you choose not to.
Otherwise, you might be setting up a will contest after you pass.
When a person’s wishes are logically thought out and
expressed through a will, though, messy scenarios are far less likely to unfold.
Evelio and Milagros Esteban are in their 70s and they’ve been homeowners for years. But recently they ran into trouble paying their mortgage. That was when they mistakenly transferred their home deed to another Miami resident, who offered to help them rent out their home. Thinking they were signing a Section 8 housing application — which would help them rent out space affordably to low-income people — they in fact signed a quitclaim deed.
can span decades. Naturally, not all homeowners outlive these
long-term loans. Here, we discuss what happens when a homeowner
passes away with a loan still on the home. This can be a tough topic to
confront, but reviewing the potential scenarios will help you prepare for the
wants to get ready to sell the house, and pay off some debt.
rub. The will never went through probate, and a different relative of John’s
has been living in the home all this time.
Who gets the
named as the next owner in the will, and never refused the
deed. So, legally, A.W. owns it, right? Wrong. Procrastination is
the thief of assets, as A.W. learned the hard way. A will does not enact
itself. It has to be probated according to a timeline.