Estate planning and property ownership go hand-in-hand for many individuals in Kansas City. After all, a major component of estate planning is determining how to pass your property on after you die. However, did you know that how you own property can affect what you can do with it through estate planning?
For example, lets look at property held in trust. In fact, a revocable trust is a popular estate planning vehicle for many in Kansas City. In a revocable trust, the individual transfers property to the trust, meaning that ownership of the property changes from a person owning it as an individual to that person owning it as the trustee. Therefore, when the creator of the trust passes away, the designated successor trustee will be considered the owner of the property in the trust and will make distributions to the creator’s beneficiaries per the terms of the trust.
That being said, some people do not want to create a trust, but prefer to retain ownership of their property as an individual. There are plusses and minuses to this. One thing to keep in mind is that if you are the sole owner of the property and there is no trust, your property may need to go through probate after you die in order to transfer title. In addition, it is important to understand that if property is held by a sole owner (or two co-owners) it could be subject to creditors’ claims. However, one plus of sole ownership is that the individual retains the right to sell the property if he or she wishes to do so.
This is only a brief overview of how property ownership affects estate planning and vice-versa. In fact, estate planning is highly complex, with many alternatives that can be considered. Therefore, individuals in Kansas City interested in estate planning should seek the help they need to create an estate plan that meets all of their needs.
Source: heraldextra.com, “How you own property affects estate planning,” Feb. 4, 2016