You may have the best of intentions with passing on property to other people directly, but it can create unexpected consequences if you’re not careful, Instead, you may turn to a range of tools to help ensure your wishes are followed, and one common strategy is to use a trust either during your life or in plans after you pass away to provide more control and clarity.
The most substantial transfer of wealth in our nation’s history is upon us, and you have many opportunities to leave property to your heirs and a will. However, when you put things in your will, that inheritance then goes through a legal process known as probate. You can avoid the public and time-consuming process of probate by creating a trust instead. Any real property currently owned by you may be transferred into an irrevocable trust or a revocable living trust.
You can customize a trust to the needs of your family or individuals, but getting out of probate is only one primary benefit of using a trust rather than a will or in addition to a will. When it comes to trust based real estate, upon the death of the owner, beneficiaries may also be eligible to tap into a step up in basis that they would not achieve with another method known as the lifetime gift of real estate. A step up in basis accounts for the adjustment of the value of inherited assets to their current fair market value, which therefore reduces the capital gains tax burden that the recipient owns on the asset.
Depending on your circumstances, this could have substantial financial repercussions for the loved ones you named to receive the asset. Communicate with an estate planning attorney in New Hampshire or Maine to determine whether or not this is most appropriate for you.