Creating an estate plan is one of the most responsible things you can do to take care of your loved ones. However, estate plans are about much more than deciding who gets your life insurance money and savings accounts. Deciding what to do with your California home is an important factor in your estate plan.
Revocable Living Trust
For most Californians who own property, a revocable living trust is the best way to pass a home to their beneficiaries. A revocable living trust allows you to designate your beneficiaries as well as which assets should be distributed to whom and when. The title to your property will be changed to your trust so that your property can pass directly to your beneficiaries during the trust administration process after your passing.
Qualified personal residence trust
A qualified personal residence trust allows you to give your home to your child or children while you are still living in it. As the creator of the trust, you can set a date known as the “control period.” For instance, you can decide that you will still control the property for 20 years before the home becomes the property of your children.
There are distinct tax advantages to implementing a qualified personal residence trust because the value of your home will not be calculated into the overall value of your estate. These trusts are used in very specific circumstances. Talk to an experienced attorney to see if a qualified personal residence trust should be part of your comprehensive estate planning strategy.
Creating an estate plan is an important process that requires an open and honest discussion with your estate planning attorney to ensure your wishes, values, and goals are accurately reflected in your legal documents. Always work with an attorney who is familiar with the estate planning and probate process to make sure your beneficiaries are protected.