Estate planning is a subject that most homeowners probably don’t think about. However, it’s a necessity that we all have to deal with. For example, what will happen to your home when you die?
It is important to deliberate and make the right decisions regarding your home and other assets to ensure that you have a defined way of passing down your assets to your heirs.
Is a Will Important?
Yes, it is. If you don’t have a will, who inherits your home will be based on the laws in California. However, if you want your home to go to a particular person, a will is necessary.
How is Your Home Handled in a Will?
It depends on whether the property is designated as a tenancy in common or a joint tenancy. A joint tenancy is where two people co-own the property in equal share with “rights of survivorship.” If one person dies, the ownership of the property is passed on to the surviving owner.
A tenancy in common is where two or more parties own the property but unlike with joint tenancy, the tenants have no right of survivorship, except when the deceased has a will specifying how the property is to be divided among the owners who survive. Otherwise, the share of the property still belongs to the owner, and their will directs where their interest will go.
What is Probate Administration?
Probate is the legal proceeding where the court decides how a person’s assets will be distributed to their family. It can take up to 1 year or more and can be expensive since it requires hiring a probate attorney.
What about a Living Trust?
A living trust is not a will, but rather a legal document that puts your assets in a single box and asks someone you trust to manage and distribute your assets if you become disabled or pass away. Ideally, you should select a trustee and a backup trustee, who in case your first choice is unable or unwilling to act on your behalf, can act on your behalf.
The benefit of a living trust is that it allows you to avoid probate. If you place your home into your living trust, you will help your family avoid probate and your home will most likely be passed on to your loved ones without court supervision.
The Bottom Line
It’s a smart choice to put your wishes into writing so that your beneficiaries are not left confused trying to sort out who gets your home once you are gone. Having no will or living trust can complicate their relationships, cost tens of thousands of dollars in attorney’s fees, and won’t help them in their grief. Be sure to have a clear discussion about your estate plans with all the beneficiaries and people who should be in the know to avoid any confusion or bitter squabbles along the road.
Thanks to our friend, trusts and estate planning attorney in Carpinteria, Neal Bartlett, for his insight on how does estate planning works. Neal is the founding attorney at Bartlett & Herrington, PC. He helps families in Carpinteria, Montecito, Ventura and Santa Barbara create estate plans and elder law plans to protect their families and assets.
By Neal E. Bartlett, Bartlett & Herrington, PC