The question "How do I leave my house to someone when I die?" should be the foremost on the mind of any mindful property or house owner. This question is most important when the property owner has no spouse or known relatives.
Legal documents such as the US last will and testament template help to make the process of leaving a house in a will easier and reduces the financial burden on family members.
This will relieve your family from the stress and potential disputes that may arise when determining how to divide your estate after your death. In the case of dying intestate, ownership of your real estate assets will be given to your named beneficiaries.
There are several ways to will a house or a real estate property over to someone. But, for this article, we will majorly focus on explaining what a will is, its benefits, and ways of leaving property in a Will.
Before we proceed, let’s define what a will is.
What Is A Will?
A Will is a legal document that expresses the wishes of a deceased over the care of his/her loved ones, as well as the proper distribution of properties or assets to privileged individuals or beneficiaries as heirs.
It also carries out the deceased instructions and desires over debatable actions or decisions after death as to who, where, and how instructions are received and executed. In some cases, a Will can be interpreted to be a lawful recognition of one’s dying wishes.
A Will must not be confused with a Trust. A Trust refers to a legal contract that permits assets to be transferred from an owner (grantor) to a trustee.
While the terms of a trust can become effective after the transfer of assets to a trustee - whether the grantor is dead or alive, Wills can only become effective after the passing away of the owner.
Now that we've established that, let's discuss the different types of Wills.
Types Of Wills
Wills are of different types, depending on one's situation. They include:
1. Testamentary Trust Wills also called Will Trusts or Trust Under Wills - This is the most common type and is best suited for an individual whose heirs are minors. It is used to transfer estate holding, appoint guardians for minor heirs, name the executors of the Will, and conditions for the Will to be carried out.
This document must be signed in front of a minimum of two witnesses, preferably a notary.
2. Living Will - A Living Will is ideal for end-of-life planning and expresses one's wishes regarding future medical care in the event of becoming incapacitated.
This particular type of Will significantly reduces the burden on your loved ones if difficult decisions must be made on your behalf.
3. Pour-over Wills - This type goes hand-in-hand with creating a trust where your assets flow into. Pour-Over Wills is useful if all the assets have not been into a Trust. It ensures that the remaining assets will automatically go to a previously established trust when the owner dies.
4. Joint and mutual Wills - This Will is for married couples who wish to inherit each other's assets in the event of a partner's death. While a joint will is signed by both spouses, a mutual will is separately written and signed by each partner.
Other types of Will include Oral, Holographic, Deathbed, Nuncupative, and Simple. In the absence of a signed Will, most states default to per stirpes probate laws - where you or your family has no control of who inherits what asset.
How To Leave Real Estate To Beneficiaries
Can you leave a house in a Will? The answer is YES. But before you do that, be sure to seek the services of a Real Estate attorney on how to go about such. It will help put you in a better position in understanding how to leave real estate in a Will.
The following are the different ways you can transfer the ownership of real estate upon your death:
Outright Gifts At Death
Gifts in your Will
As earlier mentioned, you can leave your real estate in a Last Will and Testament. Your attorney should guide you through the process. However, this method usually requires your personal representative to submit your Last Will and Testament to the probate court to begin the probate process before the transfer of the asset under the terms of your Last Will and Testament.
Gifts from a Trust
Family or loved ones can receive certain properties through a Trust following your wishes. However, in this case, the trustee - rather than your personal representative - will privately hand over the property to your intended beneficiaries without the need for probate.
Gifts Using Enhanced Life Deeds
Some states have laws that allow real estate owners to register with the local land records office to obtain a deed that automatically transfers the property title to a named beneficiary at the death of the original owner - without the need for a probate court. This method can be much simpler and more cost-effective.
Gifting Real Estate To Different Persons
This method applies when you want to leave one property to several people after your death.
Tenancy In Common
This is often used as an alternative for joint ownership between unmarried people. Each joint owner can access and enjoy the entire property - though they only own a portion of it. However, if one joint owner dies, their share passes to their own heirs or beneficiaries instead of the other joint owners.
Joint Tenancy With Right Of Survivorship
This is similar to tenancy in common. However, in this case, a joint owner's death leads to the transfer of ownership to the other joint owners.
Tenancy by the Entirety
This type is practiced in Florida, intended only for married couples. This type protects a joint owner from single-handedly terminating the joint ownership. For example, other joint owners are protected if one of them encounters legal issues.
Life Estates and Remainder Estates
In this case, a real estate owner assigns a share of the property to a recipient for life. However, the recipient does not have the right to sell, transfer, or leverage the property.
Benefits of having a Will
The benefits of having a Will are numerous. Most importantly, it eliminates potential challenges from both family and business associates.
A Will helps you to effectively take care of your loved ones in your absence. For example, when you leave a real estate property for your family members, they would not need to worry about things like mortgages anymore.
It guides your dependents in knowing what to receive upon your death. Therefore, your loved ones will have little or no conflict as regards who receives what.
You have the freedom to choose a trusted executor. It is the responsibility of the executor to manage and effect the disbursement of your assets for the benefit of all involved.
It helps avoid the need for litigation. Assigning a trustee helps remove the need for unnecessary court proceedings. Also, using a notarized document eliminates any form of doubt.
Having a Will prevents the intervention of the government regarding the assets of an individual who died intestate. Consequently, the said assets might aid another part, such as a charity organization - as long as they are listed as beneficiaries.
Lastly, a Will goes a long way to provide for one upon retirement and loss of income or employment
Since death is inevitable, it is something we should all prepare for. If you own a business or real estate, your will can specify who gets those assets and when.
Knowing which Will is best for your situation is vital so you can confidently do all you can to safeguard your legacy and effectively take care of your loved ones in the future.