Estate planning is crucial. If you own property or several properties, you may wonder how you can pass your assets down to the next generation in the event of your passing. You don’t need to be a millionaire to ensure your goods are secured and distributed properly to your next of kin.
Explore Wills and Trusts
One of the first things you’ll do when estate planning is determine whether you want a will-based plan or a revocable trust plan. A will directs who should receive property that is in your name without a designated beneficiary. Revocable trusts, however, are a more flexible option with the power of a trust. You will name a trustee, typically yourself or a spouse, whose job is to manage the trust’s affairs. In this case, the trustee manages who of your kin will receive property and other assets.
Add Children to Property Deeds
Adding your children to your property’s deed is a simple way to ensure that after your passing, the property will go to them. However, the only downside is that once you add their names to the property, they will share the same rights and liabilities to the home as you do. If this is something you are concerned about, for whatever reason, you may want to consider putting the house in a Revocable Trust. This type of trust is where your designated trustee will have the power to delegate which of your children gets the home in the end.
Gift Your Property
If you want to maintain ownership of your property, another option you have is gifting. In some cases, gifting allows you to reduce your and your loved ones’ exposure to estate taxes. Your CPA will work with you during the estate planning process to determine how large a gift can be to avoid taxes. Otherwise, your loved ones will need to pay taxes on the property. A gift deed will allow you to transfer your property to your children, which means the individuals inheriting your property will only have the property in the event of your passing.
Sell Your Property
Another option is to sell your property to your children. We recommend consulting with your attorney for tax purposes prior to making this choice. When selling at a lower rate than the property’s market value, the remaining amount will be considered a gift.
Estate Planning in Birmingham
Estate planning in Birmingham allows you to have control over how your assets are distributed. This includes real estate, vehicles, jewelry, stocks, and so much more.
At Sovereign CPA in Birmingham, AL, we offer comprehensive estate planning for people of any age and lifestyle. Our expert team can ease your worries, knowing your family or friends will be taken care of in the event of your passing. Call (205) 402-4245 to get started today!