The Best Ways to Transfer Real Estate
Owning property in this country is not only the goal of many Americans, it is much more accessible than property ownership in other places. Keeping property in the family is also an important part of the reason behind any purchase for most individuals, and this concern is particularly crucial when the primary owner dies and surviving family members must look to the law or estate documents to determine how it will be distributed. Because of the high value most real estate has, there is a legitimate concern about who might have rights to inherit an asset, as well as the potential tax liability of the new owners. No one wants to leave a spouse or children with an asset that will add to their financial burden if there are ways to avoid doing so. The biggest concern many families have related to transferring property after death is the time and expense involved with probate. Several options are available to transfer property, each with its own set of advantages and disadvantages.
How the property is owned, meaning how it is titled and the form of ownership used, will determine if probate is necessary or not. If property is owned by a trust or with another person as joint tenants with the right of survivorship or as tenants by the entirety (a property ownership option for married couples), the asset will not need to go through probate prior to transfer. This distinction is based upon the fact that, in the case of a trust, the deceased did not have direct ownership of the asset at the time of death, the trust did. In these cases, the trustee would have power to transfer the property under the terms of the trust documents. For joint tenancies, the property passes to the other owner automatically upon the death of one owner, so the asset is never without a valid owner and further transfer is not required. Often, people choose to transfer all or part of their interest in property to children and other heirs before they die to make the transfer of ownership easier. The main drawback of this option is the need for consent from the other owners to sell or refinance the property. This can become complicated and essentially strangle the ability of a parent to use the property as she/he wishes.
When Probate Is Necessary
Alternatively, when property is owned by one individual or with another person as tenants in common, probate will be necessary for ownership transfers after death. Property owned individually would pass to heirs or beneficiaries through a will or under the laws of intestacy for those without a valid will. Tenants in common own an interest in property, and this interest passes to heirs as determined by a will or by State law. Depending on a person’s needs, they may need the property to be unencumbered by types of ownership described above so it is more easily sold, mortgaged, leased, etc. Knowing how to plan for the transfer of real estate is an integral part of estate planning, and should be discussed with an attorney to determine how best to approach the issue.
Speak with a Florida Estate Planning Attorney
Planning for your family is a big responsibility, and to ensure everything matches your wishes, talk to a Clearwater estate planning attorney about your circumstances. William Rambaum knows how hard it is to find the right estate plan on your own, and is here to help you find the best possible solution. Contact the firm to schedule an appointment.