All property you own when you die becomes part of your estate plan unless it is held by a trust, has a beneficiary, or is otherwise exempt from the estate. If real estate is titled in your name, it is part of your estate. Therefore, you need to ensure you make provisions for passing the real estate to your heirs. In this blog, our Palm Springs estate planning attorney discusses how real estate ownership affects an estate plan.
What Does Ownership Mean?
Real estate or real property is land and anything attached to or growing on it except for items that can be removed from the land without causing harm. Holding title to real estate creates ownership. Legal ownership gives you rights associated with the real estate.
You can hold title to real estate in several ways. How the real property is titled in your name impacts several things, including estate planning.
Ways You Can Hold Title to Real Estate and How It Affects Your Estate
When you purchase real estate, you can title the real estate in one of the following ways:
Sole Ownership
Your name is the only name that appears on the deed to the property. Upon your death, the property becomes part of your estate. If you have a will, the real estate transfers according to the terms of your will. However, if you do not have a will, the real property passes to heirs according to California intestate laws.
Joint Tenancy
Joint tenancy has two or more names on the title to the property. The joint tenants own an equal interest in the real estate with the right of survivorship. Instead of passing through your estate, your interest passes to the remaining tenants upon your death.
Community Property
California community property laws mean that real estate acquired during the marriage is shared equally with a spouse, even if the title is only in your name. There are exceptions, such as terms of a prenuptial agreement and inheriting property.
You should consult your estate planning attorney to determine how community property will pass after your death. Your lawyer can help you develop your estate plan to accommodate your wishes for your interest in the property.
Other Options for Title Real Estate for Estate Planning Purposes
You can title real estate in a trust. Placing the title to the real estate in the trust’s name avoids probate entirely. The real estate is managed and distributed according to the terms of the trust agreement.
Another option would be to title real estate in the name of a Limited Liability Company (LLC). The LLC owns the property, but you have ownership of the LLC. You can pass your interest to heirs before and after your death in several ways.
The best way to ensure you utilize estate planning tools effectively is to work with an experienced estate lawyer.
Learn More During a Free Consultation With a Palm Springs Estate Planning Attorney
It is always wise to review your estate plan periodically with your attorney. However, if you have a significant change, including purchasing real estate, it is crucial to review your estate plan. If you have questions about estate plans, call Heritage Legal, P.C. to schedule a consultation with our Palm Springs estate planning attorneys.