It’s a nightmare scenario for a lot of people — what if the most valuable thing in your possession was denied to your kids after your death because of some flawed paperwork? Luckily, leaving your house doesn’t have to be a legal Thunderdome if you take the time to put everything in order well in advance.
A credit.com report listed three major steps that can keep your home safely and securely in your family for generations to come, but it’s also worth consulting with a qualified estate planning attorney. Because if your kids are going to fight over something, let it at least be your mint condition collection of Boz Scaggs records.
1. Put it in your will
Sounds simple enough, right? But naming beneficiaries — and keeping your will up to date — is extremely important. Think of what would happen if you named your partner as the beneficiary, later split, and then failed to update your will. Credit.com cites another example where a brother and sister inherit their parents’ home and disagree about whether to sell it. Since they both inherited an undivided interest in the estate, they would have to come to an amicable agreement on what to do with the property. If not, it’s off to the courts.
2. Use the right words
The lesson of No. 1 carries over into No. 2. Not only do you have to put everything on paper, but you also have to be as specific and precise as possible. Do you know the difference between “transfer on death” and “joint tenant with right of survivorship (JTWROS)”? Well, you need to. If you choose the first option (assuming you own your home outright), your home is immediately transferred to the person or persons named as beneficiary on the deed, assuming this option is available in your state.
In the case of JTWROS, you co-own your home with someone else, and the ownership is passed to your co-owner automatically if you pass away first.
3. Consider whether to create a living trust
Unlike a will, a living trust helps you manage your assets while you are still alive, and you can exert more detailed control over what happens to your possessions when you die. One of the advantages of this type of situation is that your house will pass to your designated beneficiary without having to go through probate (a court-supervision process that accompanies a will), which means fewer delays and expenses. Therefore, your home can get transferred to your children much more quickly and efficiently.
Finally, it’s smart to run all of your plans by an estate attorney or financial professional to make sure everything is legit and won’t cause any unfortunate issues down the road.
Things to Consider
- Flawed paperwork can make this process much more difficult than it needs to be.
- If you want to seamlessly pass your home to your kids, consider creating a living trust.
- Make sure you meet with a financial professional to ensure everything is done to the letter.
This article is provided by Everplans — a life and legacy planning company dedicated to transforming the way people get their families organized. For more information, visit: everplans.com
Neither Transamerica nor its agents or representatives may provide tax, investment, or legal advice. Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.