{"id":692,"date":"2019-06-24T08:16:50","date_gmt":"2019-06-24T12:16:50","guid":{"rendered":"https:\/\/www.deeds.com\/articles\/?p=692"},"modified":"2024-04-25T23:21:05","modified_gmt":"2024-04-26T03:21:05","slug":"estate-planning-for-your-real-estate-holdings","status":"publish","type":"post","link":"https:\/\/www.deeds.com\/articles\/estate-planning-for-your-real-estate-holdings\/","title":{"rendered":"Estate Planning for Your Real Estate Holdings"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"alignright is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/06\/estate-planning-for-your-real-estate-holdings-1024x538.jpg\" alt=\"Image of a house with trees around in the morning light. Captioned: Estate Planning for your Real Estate Holdings.\" class=\"wp-image-693\" width=\"512\" height=\"269\" srcset=\"https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/06\/estate-planning-for-your-real-estate-holdings-1024x538.jpg 1024w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/06\/estate-planning-for-your-real-estate-holdings-300x158.jpg 300w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/06\/estate-planning-for-your-real-estate-holdings-768x403.jpg 768w, https:\/\/www.deeds.com\/articles\/wp-content\/uploads\/2019\/06\/estate-planning-for-your-real-estate-holdings.jpg 1080w\" sizes=\"auto, (max-width: 512px) 100vw, 512px\" \/><\/figure><\/div>\n\n\n\n<p>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.<\/p>\n\n\n\n<p>However,\nwhen you hold several properties, you need to take steps to protect that\ninvestment. One of the ways that you should do that is by developing an estate\nplan that works for your unique situation. It is not only a good idea for you\npersonally, but it will also be very helpful for your heirs.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\">Estate\nPlanning is Especially Important for Real Estate Investors<\/h2>\n\n\n\n<p>As a real\nestate investor, you will likely have more assets to divide upon your death\nthan the average person. It is much easier to divvy out money compared to\nproperty, but that property has real value that you do not want your heirs to\noverlook or misunderstand. If you want to ensure that your heirs get the most\nout of your hard-earned investment portfolio, then you need to take steps to\nensure that they do that.<\/p>\n\n\n\n<p>Proper\nestate planning can also help your heirs avoid wasting time and money on court\nfees, accountants, realtors, and related tax obligations. Going through the\nloss of a loved one is hard enough without also having to administer an estate\nwith little or no direction properly.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">The\nTools You Need for Estate Planning for Your Real Estate Holdings<\/h2>\n\n\n\n<p>Many people\nmake the mistake of assuming that if they have a will, then they have an estate\nplan. Unfortunately, a will can only do so much for someone who has passed. It\nmay not correctly address every issue that may crop up after your death.\nInstead, you may need to use a will in conjunction with several other estate\nplanning tools to accomplish your goals and make your passing easier on your\nloved ones.<\/p>\n\n\n\n<p>Below is a\nquick outline of some of the tools that you may want to use as you develop your\nestate plan to address your real estate holdings.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Using\nDeeds as Estate Planning Tools<\/h3>\n\n\n\n<p>As a real\nestate investor, you know that a property deed shows a transfer of a property\nfrom one person or entity to another. It has particular requirements that must\nbe met to be valid under state law. It includes things like:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>The name of the seller<\/li><li>The name of the buyer<\/li><li>The purchase price, if any, of the property<\/li><li>The legal description of the property<\/li><li>The date on which the transfer took place<\/li><\/ul>\n\n\n\n<p>Someone who\nis doing estate planning can create a \u201ctransfer-on-death deed\u201d to help easily\ntransfer property from one person to another at the time of your death. This\ntype of deed can be especially beneficial for those who have real estate\nholdings because it allows you to move real property from you to a loved one\nwithout having to go through the often expensive and time-consuming process of\nhaving a will probated. A quick transfer ensures that the property changes\nhands fast so that your heirs can immediately take possession.<\/p>\n\n\n\n<p>Not all\nstates permit transfer on death deeds, but many do. The location of the\nproperty will have a significant impact on whether this type of estate planning\ntool is available to you.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Trusts:\nOne of Your Main Estate Planning Tools for Real Estate Investors<\/h3>\n\n\n\n<p>An\nirrevocable trust is often considered one of the most useful tools available\nfor those who have real estate investments. Trusts can be a great way to avoid\nundesirable tax consequences, but they are also helpful for many other reasons,\neven if estate taxes are not a concern for you.<\/p>\n\n\n\n<p><strong>Avoiding\nProbate<\/strong><\/p>\n\n\n\n<p>Perhaps the\nmost beneficial reason to hold real estate in a trust is that any property\nowned by a trust, rather than titled in your name directly, will not have to go\nthrough the probate process upon your death. Probate can be time-consuming and\nexpensive, but having a trust with real property in it helps avoid all of those\npotential issues.<\/p>\n\n\n\n<p>Avoiding the\nentire probate process can also allow you to skirt around having to cover\nestate taxes as well.<\/p>\n\n\n\n<p><strong>Creativity\nand Control<\/strong><\/p>\n\n\n\n<p>You can also\nset out that the beneficiaries of a trust are different people. If you want one\nchild to have a particular property, you set up a specific trust for them. On\nthe other hand, if you want a child to just have the income from a property and\nhave someone else manage it, you can do that, too. You have a lot more control\nregarding how the property is used and how long that asset will last for your\nloved ones if you establish a trust as part of your estate plan.<\/p>\n\n\n\n<p>One unique\nfeature that is worth noting is that you can also create a trust that permits\none person to use the real estate (or the income from the real estate) for\ntheir lifetime, with the property ownership transferring to another person (or\nseveral people) after they pass. The interest in the second \u201clayer\u201d only\n\u201cvests\u201d upon the death of the person who has the right to enjoy the property\nfor their life. The term \u201cvesting\u201d essentially means that someone has a present\nright to enjoy the real estate. With a trust, you can dictate who enjoys the\nproperty or its income and when.<\/p>\n\n\n\n<p><strong>No\nGuardianship or Conservatorship Necessary<\/strong><\/p>\n\n\n\n<p>If you\nbecome incapacitated and can no longer manage your affairs for any reason,\nhaving a trust will help avoid the necessity of creating a guardianship or\nconservatorship to manage your real estate holdings as well.<\/p>\n\n\n\n<p>You may need\na guardianship or conservatorship for other assets or to deal with health\nissues generally, but you can be confident that your real estate holdings will\nremain unaffected in that type of situation.<\/p>\n\n\n\n<p><strong>Asset\nProtection<\/strong><\/p>\n\n\n\n<p>Trusts also\nprovide asset protection if they are irrevocable as well. By putting each piece\nof real estate in a different trust, you limit your legal exposure to just that\npiece of real estate. That benefit applies while you are living in addition to\nthe benefits that arise after you pass.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Using\nEntities as an Estate Planning Tool<\/h3>\n\n\n\n<p>Another\npotential estate planning tool that can work well for real estate investors is\ncreating a business entity to hold and manage the real estate. Practically\nspeaking, having an entity like an LLC own your real estate instead of having\nyour name on it outright has a lot of the same benefits as creating a trust for\nthe real estate in terms of asset protection. However, if you want to have\ncontrol over the real estate after you pass, a business entity may not be the\nbest option for you. The ownership interest in the LLC will also be considered\nin part of your estate.<\/p>\n\n\n\n<p>Transferring\nownership in an LLC after you are gone is easier than passing a piece of\nproperty outright. There is no need to actually transfer the real estate\nbecause it can remain in the name of the LLC, for example. Instead, you are\ntransferring membership in the LLC rather than the property itself. &nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Creating\nan Estate Plan that Meets Your Needs<\/h2>\n\n\n\n<p>Every real\nestate investor is different. Those differences come in many forms\u2014from their\nunique property portfolio to their goals regarding their estate plan. Managing\nyour real estate on a daily basis can be a challenge, but you need to stop to\nthink about how it will be handled after you are gone or can no longer keep up\nwith the demands.<\/p>\n\n\n\n<p>Creating an\nestate plan that is uniquely tailored to you is the best way to protect your\nassets and provide your loved ones with the support that you want to create for\nthem, even after you are gone.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>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 [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[81],"tags":[],"class_list":["post-692","post","type-post","status-publish","format-standard","hentry","category-estate-planning"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Estate Planning for Your Real Estate Holdings - Deeds.com<\/title>\n<meta name=\"description\" content=\"Proper estate planning can also help your heirs avoid wasting time and money on court fees, accountants, realtors, and related tax obligations. 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