Estate Planning Archives - Page 2 of 3

May 11, 2022April 25, 2024

Can I Quitclaim My House Into a Living Trust?

We’re glad you asked. You might have heard that a living trust can…

Have your property bypass the costly, time-consuming probate court process when you die.

Be modified if you change your mind, and even let you put the property back in your own name while you are alive.

Name a successor trustee with the power to pass your property to whomever you designate as the new owner.

All of the above are reasons many people use this method of passing their property along after they die. And a home is a typical piece of property that people put into a living trust.

Importantly, a living trust is a revocable trust — it’s a trust you control during your life, and can change. Curious as to how it works? Here, we outline the basics of using a living trust to pass a lifetime home along to its future owner(s).

October 13, 2021April 25, 2024

Should Your Child’s Name Be on Your House Deed?

Compare the Alternatives

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.

May 3, 2021April 25, 2024

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.

April 16, 2021April 25, 2024

Will Versus Quitclaim: When There’s a Conflict, Who Owns the House?

Usually, the quitclaim deed overrides the instructions in a will. But the devil is in the details.

At age 60, Letitia bought her Sacramento home, as a sole owner. Twenty years later, aged 80, Letitia went into a care home. Letitia subsequently signed a quitclaim deed and gave the home to Jackson, the only one of her three children who was not already a homeowner. Thanks to the modern convenience of remote online notarization, this was simple for Letitia to do.

Some homeowners use quitclaim deeds when the parties know the home’s history and do not expect a title search. See more at: Transferring a Deed Without a Lawyer? Here’s What You Should Know.

At age 84, Letitia passed away, survived by the three children: Jae, Jasper, and Jackson.

Letitia left a will that appears to give 50% of the home’s value to Jackson, with the other half divided equally between the other two siblings. But Jackson is unwilling to give up any interest the home.

January 18, 2021April 25, 2024

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, 2021April 25, 2024

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, 2021April 25, 2024

Don’t Be the Intestate Homeowner: Write Your Will

No 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.

December 23, 2020April 26, 2024

Is a Quitclaim Deed Subject to Tax?

Quitclaims are sometimes used to transfer property interests from one family member to another, or between divorcing spouses. Parents might wonder if they should use quitclaims to pass property to children to avoid the probate process. It’s easy enough to do. The homeowner signs the document with a notary, takes it to the county recorder of deeds, and has it recorded. Simple. No wonder adding someone to a deed or relinquishing rights through a quitclaim is often (mistakenly) called a “quick claim” deed. But what does the Internal Revenue Service think?

February 17, 2020April 25, 2024

What Happens If the Mortgage on Your Home Outlives You?

Mortgages 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 possibility.

April 26, 2019April 25, 2024

Don’t Quit Your Claim! A Quitclaim Deed Is Not a Mortgage Saving or Estate Planning Tool

A quitclaim deed conveys—”quits”—a person’s interest in a property to someone else. Quitclaims prove useful in certain transfers of properties among family members or between divorcing spouses. The quitclaim allows separating partners to follow a court’s direction and leave one party as sole owner of the marital home. Quitclaims might seem convenient in other circumstances, but they are rarely the best choice.

In contrast to the warranty deed, a quitclaim deed offers no assurances of clear title. In most jurisdictions a recorder of deeds must simply record a quitclaim deed; it is not the recorder’s role to investigate the circumstances of the conveyance.

Scammers may take advantage of the quitclaim’s simplicity to siphon equity from vulnerable people. After recording a quitclaim, a bad actor may sell the property with no guarantees, rent it under false pretenses, or exploit its underlying value as collateral.

Tag: Estate Planning