When a loved one dies, the heirs often have some work to do. Estate planning is essential because you can save your heirs a lengthy probate process and a lot of money if you already have your will or other legal documents in order. We don’t always know beforehand that we’re going to pass, so it’s important to make sure that your legal documents are up to date.
What to do with the family home?
Deciding what to do with the family home before you pass is particularly important when estate planning. While some people decide to transfer the property over to their heirs before they die, this option has several drawbacks. First, if your heirs are sued, the home could be taken. Additionally, you lose the mortgage interest deduction on your taxes.
Another option is to put the home into a trust, saving your heirs from going to probate when the last parent passes. You can create a separate trust for each child if there’s a lot of money at stake.
It’s especially important to figure out how you want to pass on any inheritance if you have a complicated family, such as a step-parent, who could then pass on the house to their children from another marriage if they receive the family home when the first parent dies.
Don’t miss something important while estate planning
When you’re planning your estate, it’s especially important that you at everything, including the family home and digital assets. But you also need to ensure that there are backups for things like the executor and trustee if your first choice is no longer available.
When you’re looking for ways to ensure that your heirs get as much inheritance as possible and spend as little time in probate as possible, get started on your end-of-life documents sooner rather than later.
