How to plan for a smooth transition of your real estate assets
When estate planning, it’s important to understand the legal tools you’ll want to put into place to smoothly transfer your real estate assets to those you love. It can be a daunting process to begin, but it is a necessary step to ensure that your assets are protected and passed on per your wishes. It is best to consult with a legal professional before making any decisions about your estate.
Let’s go over some of the basics so you have a better understanding of the different options and possible outcomes. The main difference between a will and a trust is that one takes over while you are alive the other one goes into effect after you die.
Wills and trusts can offer several benefits, including:
- Distribution of assets
- Avoiding probate
- Minimizing taxes
- Protecting assets
- Managing assets
What is a will?
A will is a legal document that explains what you want to happen when you die. It outlines things like who you want to get your things, your money, as well as any guardianship of your children and pets.
What is a trust?
Trusts come in many different forms, the most common being a “Living Trust.” A trust is a legal arrangement intended to ensure a person’s assets eventually go to specific beneficiaries. It’s important to understand that trusts are not just for wealthy individuals. Anyone can create a trust and provide peace of mind that your assets will go to the right people. You can amend your trust if it is a “Revocable Trust.” Once a person dies, the trust becomes “Irrevocable” and cannot be changed.
What is probate?
Probate is the legal process through which the court oversees how an estate will be distributed. The probate process ensures that a deceased person’s debts are paid, and property is distributed according to state law, with or without a will. Probate can last from a few months to years. While the laws are different in every state, in Oregon, you can avoid probate by establishing a trust. Another benefit to establishing a trust is that once it becomes irrevocable, it cannot be touched by creditors. Wills become public records when they are probated, which means that anyone can access them. Trusts, on the other hand, are generally private documents and can provide added privacy for your family.
Overall, wills and trusts can provide peace of mind and help ensure that your assets are distributed according to your wishes while minimizing taxes, protecting assets, and providing added privacy and asset management capabilities. It is important to consult with a qualified attorney to determine which option is best for your individual situation.
(The information provided in this article by a real estate broker is for general informational purposes only and should not be relied upon as legal advice. If you are in need of legal advice regarding estate planning or related matters, it is important to seek the guidance of a qualified estate planning attorney. The author and publisher of this article do not assume any responsibility or liability for any actions taken based on the information provided herein.)