With the possible exception of businesses or investment accounts, real property is often the most valuable asset someone owns. Therefore, those preparing or updating an estate plan in Colorado often need to think carefully about what they will do with their home, their cabin or even vacant land purchased as an investment years ago.
Family members might very easily fight over real property because of its value, and creditors could try to lay claim to someone’s property as a way to demand repayment for someone’s debts. Choosing the right method to transfer ownership of real property when putting together an estate plan can have a major influence on the success of someone’s strategy. These are three of the most common tactics used by those who want to protect real property in their estate plans.
Creating trusts
A trust has the legal right to take ownership of a property, which will mean that the real estate someone once owned directly will no longer be part of their estate when they die. A trust can give someone more nuanced control over what people do with the property. They can allow one family member to live there until they die and then allow for others to assume control over the property. They could also leave instructions for their children to share ownership of their cabin or lake house.
Executing a deed
There are several different kinds of deeds people can use to transfer ownership of real property to someone else as part of their estate plan. An individual might sign a deed to add a child or non-spousal roommate to the title for the property as a joint tenant who can therefore assume ownership of the property without it passing through probate court after their death. Others may execute a deed to have recorded after their death, although there may be complications and risks involved with that approach. Executing a deed while still alive is a simple way to ensure the direct transfer of property to another person or legal entity.
Leaving specific instructions
A testator can simply name one person to inherit the home in their will. Sometimes, the best way to handle real property in an estate plan is not to grant it to one person but to sell it or convert it into an income property to benefit dependent family members. Testators have the option of leaving specific Instructions about the sale or use of their real property in a will. They can also use a trust to manage the property as a business asset in the future.
Any of these approaches might prove useful for those with valuable real property and a desire to control their legacy when they die. Reviewing every option after seeking legal guidance will help testators to select the best choice given their wishes when planning an estate.