Do you want to avoid probate when it comes to the transfer of your assets at death, especially when it comes to your home? Perhaps you would prefer that home to pass directly into the hands of your adult heirs.
If the concept of a life estate is new to you, then a recent article in The Wall Street Journal ought to be on your reading list.
As the article titled “An Easy Way for Heirs to Inherit Your Home” explains, a life estate for real estate operates like a “payable-on-death account” for a bank account.
Here is how a life estate works. First, you draw up a deed to your house naming your heirs as beneficiaries. Second, you live in the house for the rest of your life. Third and lastly, after you pass, your named heirs need only present your death certificate to assume title to the family home. This can save time and money often associated with probate.
A life estate may be too simple, depending on the circumstances.
As with most things legal, things can get complicated quickly. For example, you will not be free to sell your home during your lifetime without beneficiary consent and there are tax issues to consider.
Depending upon the home and your objectives, there may be better ways to transfer the family home. Regardless, a life estate is a proven transfer tool just right for the right circumstances.
Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.
For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri) and to download free tools to help you organize your estate, visit my estate planning website.
Reference: The Wall Street Journal (February 9, 2014) “An Easy Way for Heirs to Inherit Your Home”