Estate Planning Archives

May 3, 2021May 3, 2021

After You’re Gone, Does Your Mortgage Live On?

Image of two people reviewing a mortgage and discussing end of life plans.

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.

Let’s look at how this plan could play out.

January 25, 2021January 24, 2021

QPRT: Pertinent to Your Estate Planning Goals?

Among the leading legal tools for passing wealth down through generations is the QPRT. A qualified personal residence trust, or QPRT (“Q-pert”) is a form of irrevocable trust to pass a home to beneficiaries.

The QPRT effects an immediate conveyance of the house to the trust. Nevertheless, the homeowner who establishes the trust (called the grantor) continues to pay all related taxes, and continues to receive any associated tax deductions, for a specified time. Indeed, the grantor may live in the home rent-free, based on what’s termed a qualified term interest,until the specified time when the house transfers to its beneficiary.

Your home might be modest, yet it could still be subject to federal or state estate tax together with the rest of your assets when you pass on. This is especially so when government administrations set lower thresholds for the minimum amount of a taxable estate.

January 18, 2021January 18, 2021

Should a House Be in an Irrevocable Trust?

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 beneficiaries.

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 situations.

January 6, 2021January 5, 2021

Is It Time to Place Your Home in a Living Trust?

With a 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 age.

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.

January 4, 2021January 3, 2021

Don’t Be the Intestate Homeowner: Write Your Will

No homeowner should die intestate. In plain English: Every homeowner needs a will.

Image of an elderly person looking from behind a wall in a surprised manner. Captioned: Don’t Be the Intestate Homeowner

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.

November 27, 2020November 24, 2020

What Happens When Wills and Deeds Conflict?

When a person passes away, the death certificate and last will are submitted to the county probate court. A person representative begins the process of passing assets along as the will directs — except when other valid legal instruments have priority. One of those instruments is the all-important real estate deed.

Houses can be left to their owners’ chosen beneficiaries through wills. But when someone who co-owns a house passes away, questions may arise as to what the last will says versus what the deed says. In case of a conflict, does the last will get the last word? Short answer: probably not. The long answer starts with the way the title is vested.

Survivorship Rights Vs. Tenancies in Common

When an owner dies, a properly signed and recorded deed directs and channels the person’s property interest to its next owner, typically according to the following rules.

October 16, 2020October 13, 2020

Should You Transfer Your Home to Your Children Now, or Leave It in Your Will?

Image of a stack of opened letters bundled together with yellow ribbon and a tiny old picture in a frame on top. Captioned: Should You Transfer Your Home to Your Children Now, or Leave It in Your Will?

Which is best? Conveying your home to your child or children now? Or letting them inherit it after you pass on? Conveying real estate during your lifetime can cost more than letting it be inherited after death. Then again, inheritances go through probate, which is time-consuming and subject to challenges. Here are more details on the ways the options play out. Choose the one that works best for you and your family.

June 24, 2019June 24, 2019

Estate Planning for Your Real Estate Holdings

Real estate can be a fantastic investment. It is often considered one of the most stable money moves that you can make if you are looking for a way to see real return on a business venture, sometimes with little personal involvement.

However, when you hold several properties, you need to take steps to protect that investment. One of the ways that you should do that is by developing an estate plan that works for your unique situation. It is not only a good idea for you personally, but it will also be very helpful for your heirs.

January 3, 2013November 3, 2018

Estate Planning in Michigan Using a Ladybird Deed

Michigan Ladybird Deed
(Warranty Deed with Enhanced Life Estate and Power of Appointment)

When correctly executed and recorded, this deed provides the structure for a non-testamentary transfer of real property. Leaving the real property out of a will allows the transfer to occur without the need for probate.