In our line of work, we meet many individuals and families grappling with estate planning. This process can feel daunting and emotional, especially when it involves one of your most significant assets: Your home.
With over 10,000 Baby Boomers turning 65 every single day, our country is experiencing a very large-scale transfer of wealth. The largest in the history of history.
At Sandra Ranck Real Estate Collective, we also see the other end of it, when we work with adult children handling their deceased parents’ affairs. Unfortunately, many are left with a mess on their hands, because their parents didn’t take the time to put their affairs in order. These adult children are then left to make very difficult, time-consuming decisions at a time when they’re already grieving. It is a tough situation to be in.
Though we are not estate planning attorneys or tax accountants, we would like to share our thoughts on this topic from our perspective as a Real Estate company. Please talk to a trusted attorney and tax accountant to plan out your specific estate plan needs!
What is Estate Planning?
“Estate planning” is not just about ensuring your wishes are respected; it’s also about giving your loved ones peace of mind and control during what will undoubtedly be a challenging time.
According to Investopedia, “Estate planning involves determining how an individual’s assets will be preserved, managed, and distributed after death or in the event they become incapacitated.”
Leaving Your House to Your Kids
As part of their estate plan, many adults consider transferring their homes directly into their children’s names. However, there are more steps to consider, particularly with evolving capital gains laws. There are definitely ways to do this and not do this. Talking to your attorney on this is critical. Just putting the home in a child’s name leads to all kinds of tax ramifications.
We advise consulting with an attorney to discuss other options, such as placing your home into a revocable living trust or a lifetime asset protection trust if you wish to specifically benefit your children. These mechanisms are designed to avoid probate and potentially lessen capital gains taxes, both of which ensure a smoother transition for your loved ones.
“Estate” = More Than Your House!
However, it’s not just real estate that needs attention in your estate plan. After their loved ones pass, many families find themselves overwhelmed by the volume of personal possessions (this is a huge deal in so many cases). When it comes to unique or valuable items like antiques, fine art, jewelry, collectibles, and furniture, if the family doesn’t want to keep these items (and 99% of the time they do not want to), they need to sell or donate them. This on top of everything else they need to do is exhausting for many people. It is A LOT of work and in our area very few companies to hire for help.
Unfortunately, the reality is that without prior arrangements, these items seldom realize their real worth. Many families part with the valuables at prices that are far below their worth. That’s why it’s better to make arrangements for your valuables ahead of time. If you would like your children to benefit from the investments you’ve made in these items, consider selling them at good prices before it’s too late.
Plus, in an era where digital assets are just as critical as physical ones, ensuring your loved ones have access to your online accounts is also important. An estate planning firm can provide recommendations on how to securely store and share passwords.
Leave a Legacy of Love
If you have ever found yourself in the position of being the “sandwich generation” (you are raising a family while also helping take care of things for your aging parents), you know how stressful it can be. You have the chance to alleviate this burden for your own kids, by being proactive with your estate planning!
Estate planning is good for the harmony of the family and ensures your legacy is positive. However, it’s getting more and more complicated every year, as laws change quite often. If you’re looking for a good estate planning attorney, please call our office! We can refer some very honest, well-respected firms in the area.
Long story short…Have a plan and execute it! You and your family will feel so relieved. Then they can focus on just loving you!