One of the biggest assets inside your estate is likely any real estate like your personal home. But if you are not careful with determining how to transfer this to the next generation, they could end up owing money. If a person who inherits a home doesn’t want to keep ownership of it and maintain it, they could face taxes, fees and transaction costs.
Certain states have estate tax exemption limits that are far below the federal level that could also impact your heirs directly. If your heirs are not residents of this state it is unlikely they will move there or understand the intricacies of these laws, meaning they might need to retain and experienced probate or real estate lawyer to help them.
If the value of the home exceeds any state tax exemption limits and there are no assets from the estate for those heirs to pay the taxes, the heir could be looking at a state estate tax bill with insufficient funds to pay for it. They might need to pursue individual financing options or have to sell the home directly as a result. If they do choose to sell the home, it will be taxed based on the value at the time of the original owner’s death.
As you can see there are many different components associated with this estate planning strategy and you want to make sure you have the support of a knowledgeable estate planning lawyer to help you with any of your individual plan so that you can make the most informed decision about what happens to any real estate property you own. For further information, set aside time to speak with a dedicated estate planning lawyer in your area.