You’ve worked hard throughout your life to build your assets, and it’s important to ensure that those assets go where you want them to go after you’re gone. That’s why estate planning is so important—and one of the most important aspects of your estate plan is incorporating your home and any other real estate you own.
Real estate can present unique challenges when it comes to estate planning. Here’s what you need to do to ensure your legacy is protected.
Take inventory of all your assets and how they’re titled
At the most basic level, you need to take inventory of all your assets, including real property, and ensure they’re incorporated into your estate plan.
In addition, you need to take into account how you own each piece of real estate:
- Individual property: real estate that is titled in your name alone.
- Tenancy in common: real estate that you own jointly with someone else. You and your co-owner(s) own separate stakes in the property, and each stake can pass separately to your heirs or beneficiaries.
- Joint tenancy with right of survivorship (JTWRS): real estate that you own jointly with someone else. Your stake in the property will pass automatically to your co-owner on death.
- Tenancy by the entirety (TBE): real estate that you own jointly with your spouse. You and your spouse each own 100% of the property, and when either spouse dies, the surviving spouse becomes the co-owner. In Indiana, tenancy by the entirety is only allowed for married couples.
In Indiana, the law presumes tenancy by the entirety if you co-own real estate with your spouse, and tenancy in common if you co-own real estate with someone other than your spouse.
Property that you own individually or as a tenant in common becomes part of your estate on your death, so you need to ensure that it’s accounted for in your estate plan. Property you own as a tenant by the entirety or with a right of survivorship will pass automatically on your death, outside the probate process; however, you still need a plan in case your co-owner predeceases you.
Remember that the rules vary from state to state
If you own property outside Indiana, remember that the laws governing ownership and inheritance vary from state to state. It’s always important to talk to a lawyer licensed in the other state to understand what will happen to your property upon your death or incapacity.
Consider putting your real estate in a trust
There are several benefits to placing your real property in a trust during your lifetime. First, assets that are in a trust don’t have to go through the probate process, which can help to shield your privacy and ensure a smoother transfer on your death. Second, placing assets in an irrevocable trust can help you qualify for government programs such as Medicaid, which is important if you later become incapacitated and need long-term care.
Carefully consider who will be responsible for managing your real estate
Upon your death, your personal representative (executor) will be responsible for managing your real property and other assets until they are distributed. Your designated trustee (who may or may not be the same person) will be responsible for any real estate that you place in a trust. When choosing people for these important roles, consider the following questions:
- Is this person generally responsible?
- Does this person have the knowledge and experience needed to effectively manage my assets?
- Is this person geographically close to the real estate in question or easily able to travel there if needed?
- Does this person have the time and energy to properly manage my estate?
Remember that you are under no obligation to choose any specific person, such as your oldest child, for these important roles. If you don’t have a relative who meets the criteria, it may be best to hire a professional to manage your estate.
Talk to an experienced Indiana estate planning attorney
Creating and updating your estate plan is one of the most important decisions you’ll ever make, and you shouldn’t make it alone. With extensive experience in both estate planning and real estate law, the attorneys at Hocker Law, LLC are well-equipped to help you protect your legacy and achieve your goals.
If you need help accounting for real estate in your estate plan, give us a call or contact us online today. With two offices in Indianapolis and another in Greenwood, we proudly serve clients throughout Indiana.
"I had an excellent experience with Hocker & Associates and attorney Rachel East. Rachel went above and beyond to help me and my family with estate documents. I referred other friends to Hocker who had similar experiences. I will definitely return to them for future services." — Actual Client, ⭐⭐⭐⭐⭐