For many of us, our homes are the highest value assets in our estates, especially as home prices continue to rise in Palm Springs and throughout California. Accordingly, estate planning for homeowners is a crucial part of creating a comprehensive estate plan. As a homeowner, you'll want to ensure that your home's intended heir will receive ownership of your home as privately, quickly, and affordably as possible.
Discuss Your Case With an Estate Planning Lawyer
If you are a homeowner in Palm Springs, creating an estate plan is a crucial aspect of protecting yourself, your home, and the future beneficiary of your home. Attorney Christopher Heritage of Heritage Legal, PC, can ensure that your estate plan effectively addresses the transfer of your home according to your wishes. Using his extensive experience and understanding of California's estate planning laws, he will help you develop an estate plan tailored to your goals and needs. Contact him today to schedule your initial consultation.
Co-Owning a Home With Your Spouse or Partner
Estate planning for homeowners may seem complicated, but it doesn't have to be. The first step in estate planning for homeowners involves determining how you own your property or how your property is titled. Under California law, there are numerous ways that an owner can own a piece of real estate, including the following:
- sole ownership
- community property
- community property with a right of survivorship
- joint tenancy
- tenancy in common
If you are the sole owner of your property, your deed will be titled in your name only. For those who do own the property solely, their property will be included in their estate. When you pass away, the property will go through the probate process and be distributed to beneficiaries according to your will. If you do not have a will, the probate court will distribute property according to California's intestacy laws.
If you own your property with a spouse or domestic partner, it is considered community property. In California, spouses and domestic partners who own a home together can hold the title as community property with the right of survivorship. In this case, when one spouse or partner dies, the home’s title automatically transfers to the surviving owner. Thus, the surviving spouse will own 100 percent of the property. Unmarried co-owners can benefit from the right of survivorship by owning this property in a joint tenancy.
Owning your home with the right of survivorship is one way to easily transfer your home to your spouse or partner after you pass away. However, your deed must exclusively state that the property is owned with a right to survivorship to take advantage of these benefits. If you don't use the appropriate language, your ownership could revert to community property or tenancy in common, causing additional complications. Attorney Christopher Heritage can help you ensure that your spouse receives ownership of your house automatically after you pass away.
Bequesting or Gifting Your Home
Would you like to give your home to your adult child, grandchild, friend, or even a nonprofit of your choice? If so, you can bequest, or leave, your home to a beneficiary in your will. Creating a will is a relatively straightforward process, but some complications can arise with giving your home to someone through your will. First, your beneficiary will need to go through the probate process, which can be costly and time-consuming. The probate process can take anywhere from a few months to over a year or longer and will cost approximately 5 percent of the value of your estate.
Placing Your Home in a Trust
Many homeowners are choosing to transfer ownership of their home into a trust to avoid the probate process. There are many different types of trust you can take advantage of in California. Transferring your home into a revocable living trust allows you to continue to manage and live in your property during your lifetime. You can provide instructions for how the property should be used, and the trustees must carry out the directions you've outlined in the trust agreement. You can even name yourself and your spouse as a trustee and retain ownership rights throughout your lifetime until your appointed successor trustee takes over managing the trust upon your death.
Another option is to transfer your home into an irrevocable trust. Unlike a revocable trust, an irrevocable trust cannot be terminated or amended after it is created. In other words, you will transfer ownership of your home into the trust, and you cannot undo this process even if you change your mind. Irrevocable trust comes with several unique benefits. First, you will shield the property from judgments and creditors. Second, you also prevent the value of your home from being included in your estate’s total value, which could help you avoid paying estate taxes.
Estate Planning for Second Homes
If you own a vacation property, you may want to consider replacing your vacation property with a qualified personal residential trust (QPRT). These types of trust are popular for vacation homes because this type of trust will lower the gift tax your beneficiary must pay as a delayed form of a gift. The homeowner must give up the home on a specified date or sign a rental agreement to stay in the home. It's advantageous to pay off the mortgage before transferring your home into a QPRT trust to simplify tax issues.
Consult With a Palm Springs Estate Planning Lawyer Today
Attorney Christopher Heritage understands how important your home is to your overall estate plan. You worked hard to purchase a home and pay your mortgage, and he will help you protect your home and your wishes by creating a thorough estate plan. There are many different options for transferring your home to your beneficiary or beneficiaries. After reviewing your goals with you, he will provide you with sound legal advice and help you understand all of your options to make the best choice possible. Contact him today to schedule your initial consultation. |