When you die, the biggest assets that you leave behind can help provide for your family members. Other than retirement savings or a life insurance policy, your primary residence is probably your most expensive asset.
Whether you expect your family members to live in your home or to fix it up and sell it, you want them to have access to the property with minimal delays or reductions in the value of the property. There are two ways that estate administration could drag down the inherited wealth passed on through your home.
The first is by sitting vacant, which will negatively affect the value. The second is by going through probate court, which might mean that family members have to pay thousands of dollars in costs. How can you keep your real estate holdings from entanglements in probate court after you die?
Arrange for the property to transfer as soon as you die
Minnesota law is clear that estates with real estate must pass through probate. As long as the home is in your name, the courts will have to monitor the administration of your estate. If you live with the person who will inherit the house, such as a spouse or a child, you can adjust how you hold title to ensure the fastest and smoothest transfer of ownership possible.
If you hold title as joint tenants with rights of survivorship, the other party will immediately assume your share of the home’s equity and ownership when you die. Such transfers occur automatically and therefore do not require probate oversight.
Take the ownership of the home out of your name
Creating a trust and transferring the deed of ownership to the trust can ensure that the probate courts won’t have control over the property when you die. The trust, not you, becomes the owner, while the trustee is the one who helps enforce the rules you set for the property.
The trustee will be the one who ensures that the right people live in receive ownership of the property. A trustee can also sell the property for you and distribute the proceeds among your loved ones.
Understanding the most common tactic to keep your home out of probate court can help you decide what steps to take when estate planning.