If there are certain assets you want to ensure pass to particular people after you die, estate planning is essential. For instance, most people want to leave their biggest asset, which is often their home, to their children. There are actually a number of ways you can do this and we will discuss some of them here.
Leaving Your Home to Your Children
While most people think of a will as the central mechanism for property distribution after a person passes away, it is actually just one of a number of options. A will can be useful for property distribution, but it does have its downsides. The main downside of leaving property via a will is the fact that it will be subject to probate proceedings. This will mean delays in your heirs receiving their inheritances. In addition to be time-consuming, probate can also be expensive and affords no privacy as the proceedings are a matter of public record.
A trust may be a solid alternative route to leave your home to your children. In order for this to be accomplished, however, the trust must be properly established and funded. This means that you will have to transfer ownership of your home to the trust. The good news is that assets held in a properly funded trust avoid probate.
While most people opt to hold their home in joint ownership with a spouse, it is possible to hold a home in joint ownership with an adult child. If you hold the property jointly with rights of survivorship, then your ownership interest in the property will automatically pass to the surviving co-owners, your child, upon your passing. This would also mean that probate of your home would be avoided.
Another way of leaving your home to your children is through a special kind of deed. Florida is among the states that do not allow for transfer on death deeds. A transfer on death deed allows for a piece of property to be transferred automatically upon the owner’s death to a named beneficiary. Florida does, however, allow for the use of a lady bird deed which can essentially accomplish the same thing. A lady bird deed is a legal tool that provides for the transfer of property at death in a low cost manner that also avoids probate.
With a lady bird deed, the property owner is allowed total control in his or her lifetime. Upon the owner’s death, the property is automatically transferred to the designated beneficiaries. It is considered to be an enhanced life estate deed. That means that the owner, the life estate holder, has full rights to freely transfer, sell, or mortgage the property over his or her lifetime without needing the consent of the remainderman, the named beneficiary on the lady bird deed. The property owner has total control over the property during his or her lifetime and upon death, ownership of the property is transferred to the remainderman.
Estate Planning Attorney
Let the dedicated estate planning team at Verras Law help you explore your estate planning options. There are a number of valuable estate planning tools that can strengthen and maximize the effectiveness of your estate plan. Contact Verras Law today.