Transferring Your Home To Your Loved Ones


Understanding how your property transfers at death can reduce anxiety and lead to less conflict when you’re gone. There could be significant tax implications, expenses and unexpected liens. It is important to consult an attorney before making changes to your title.

When someone passes away, there may be a probate estate or trust subject to administration. If there is a property in the estate or trust, we often recommend obtaining an appraisal. The appraisal determines the date of death value for tax purposes. If the property is sold while in the estate, the proceeds will need to be deposited into an estate account. The estate will receive a 1099S that needs to be reported on a 1041 fiduciary tax return.

If a property is vacant, the homeowner’s insurance company may not cover the property. In addition, if the property is not being used as a residence after the death of the owner, it is possible the homestead credit could be recaptured by the county before a new deed can be transferred. Once the property is ready to be distributed from the trust or estate, the personal representative or trustee must sign a new deed and record it with the land records. The job is not done unless the property is in the name of the beneficiary. As you can see, working with an estate attorney ensures that the personal representative meets all of his or her obligations and nothing falls through the cracks.

People consult estate attorneys at different stages of life. I believe the attorney should meet with the client and identify their goals. Some clients are young married couples who own their property as tenants by the entireties and aren’t concerned about what happens when they are gone. Others are widows or widowers who now own their property alone and are concerned about probate or ensuring one child has a right to remain in the home after they are gone. Each situation is unique and requires careful thought and guidance.

If a client wants to avoid probate, an attorney may mention life estate deeds with powers, revocable living trusts and joint ownership. For asset protection planning options, they may suggest creating an LLC and transferring the property into the LLC. If a client wants to protect the house from a Medicaid lien as part of estate recovery, we discuss life estate deeds without powers, irrevocable trusts and outright gifts of property. With knowledge there is peace of mind. Start planning today.

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