Estate Planning for Your Home
If you are like most people, your home is by far your biggest asset. As such, it is imperative to make sure that your estate plan accounts for your home. Estate planning for your home commonly involves ensuring that your home transfers to your survivors entirely outside of your Last Will and Testament (Will), avoiding the probate process altogether.
Probate is the legal process to transfer one’s assets, after they die, to another person or entity. When someone dies, any existing Will is filed in probate court, and an Executor is appointed by the court to represent the decedent. The Executor examines the Will and identifies outstanding debts, taxes due, and any assets, whether identified in the Will or not. The Executor then divides and distributes those assets based on the Will. Some assets, called non-Probate assets, pass to beneficiaries outside of the Will. When there is no Will, a decedent’s assets will pass to beneficiaries under the established inheritance laws of the State.
Unfortunately, probate can be a lengthy and costly process, especially if the terms of a Will are contested by the decedent’s survivors and/or beneficiaries. Even more importantly, the whole process may result in your property going to someone you didn’t want it to go to in the first place. This risk makes it wise to consider other forms of estate planning for your home.
Keeping Your Home Out of the Probate Process
If you are married, it is possible that your home will not actually go through the probate process. Most married couples own their home as “joint tenants with right of survivorship.” This tenancy means that the house automatically passes to the surviving spouse after death without the need to go through probate. Holding title in this way is a great mechanism to ensure that a grieving spouse can stay in the home and doesn’t need to fight for it.
You may want to consider some further estate planning for your home beyond the title. Homeowners often ask about transferring their home to their children during the homeowners’ lifetime; that, however, can have dire consequences if any of those children get divorced, have creditor problems, or predecease the homeowners.
A better option is to put your home in an “Irrevocable Trust” to save it from probate altogether and protect it from creditors. An Irrevocable Trust is an estate planning tool that allows you to decide what happens to your house after your death while still retaining control over your home during your lifetime. An Irrevocable Trust can also be used for Medicaid Planning to protect the home if you or your spouse should ever need to move to a nursing home.
After you die, the appointed trustee effectuates the terms of the Trust and distributes the home, usually to a family member of your choosing. The Trust is not filed in a probate court, and this can all happen without court intervention. This benefit makes an Irrevocable Trust attractive to those hoping to keep their home out of probate court after they die.
FSKS is on Your Side
Our attorneys at FSKS have years of experience with estate planning and administration for estates of all sizes, from young professionals with a modest estate to retired entrepreneurs with a successful business. We understand that no one wants their family to deal with probate after their death. We work with our clients to create an individualized and comprehensive estate plan to protect their home as well as other assets. If you require assistance or would like to discuss the preparation or administration of an estate plan, please don’t hesitate to contact James E. Shepard (email@example.com) or Jennifer Holowach (firstname.lastname@example.org) at 973-538-4700.