Nov 20 2020

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Tags: bequeath property  setting up a will  living trusts  joint ownership 

How To Bequeath Property in Your Will
How To Successfully Bequeath Property In Your Will

As an owner of residential real estate, you need to consider what will happen to your property when you die. One of the most common decisions is to leave your property to your children, or other family members as beneficiaries of your will. However, there is a right way and a wrong way of doing this.

Let's assume that you are currently the sole owner of your home and that you wish to pass your home on to your children when you die. The worst case scenario would be to not do anything and let your children try to sort the matter out on their own - a very unwise decision. At the very least, you should have a will drawn up, that includes how your assets and property will be distributed when you pass away.

Without setting up a will, it leaves the state open to decide the beneficiaries of your estate, but not without first going through a lengthy probate. When the matter is eventually settled, your home may not end up where you originally intended. This can also cause a lot of conflict and animosity between the surviving children.

To avoid this, we take a look at 4 ways to correctly bequeath your property and other assets to your family members or friends.

1. Setting Up A Will

This is the most common way to bequeath your property to your beneficiaries. You name the beneficiaries in your will that will inherit the property and stipulate any conditions. It is important to that you set this up correctly. You should ensure the beneficiaries are named correctly and you should be specific when stipulating any conditions, so to avoid any confusion or conflict down the line.

For example, one sibling may want to sell the property to pay off any debts he or she may have, while the other sibling may not want to sell. To prevent this from happening, there is another option available to instruct the executor of your will to sell the property, which is discussed below, see option 4: instruct to sell the property.

It is also important to remember that your will does not affect any property that you agree to give by another method.

2. Create A Living Trust

With a living trust, you become the trustee of a legal agreement, which allows you to hold, manage and benefit from your assets (including property), on behalf of your beneficiaries, for as long as you are alive.

You can choose to leave your property to one or several beneficiaries and you can stipulate how the property will be managed. For example, one family member may receive the home, while another family member may receive assets to the same value of the property.

When you place property in a living trust, that property is passed automatically to the beneficiaries when you die. You cannot pass property in a trust through your will.

3. Joint Ownership Of Property

'Property with the right of survivorship' means that you share the property with a co-owner, as stipulated in the deed of sale. You are both joint partners and co-owners of the property. If you should die before your co-owner, then the property is automatically transferred to them - making them sole owner of the property.

Joint ownership need not be limited to just 2 co-owners - you can stipulate additional co-owners along the way. For example, you may choose to modify your deed in a few years time to include one or two of your children, where they also will become joint tenants with right of survivorship.

In this case, each of you will then own controlling interest in the property. In the event of your death, the surviving members in the deed would continue to own and manage the property, with a greater controlling interest.

4. Instruct To Sell The Property

With this option, the executor of the will is instructed to sell the property of the deceased's estate and allocate the profits among the recipients, as stipulated in the will. The advantage of this method is that the decision to sell the property is determined by you, before you die and not left for the beneficiaries to fight over, after you pass away.

Do you need to get your home sold? Contact one of our agents today!

Summary:

There are various advantages and disadvantages to any method for bequeathing property to your beneficiaries. You should carefully consider the various options available to you and the financial situation of your beneficiaries before making a choice. Lastly, it is always a smart decision to run your plans by a real estate attorney or a qualified financial professional, to make sure that your plans are legitimate, setup correctly and have your best interests in mind.

Related Article: Get the Correct Selling Price for Your Home

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