Many Tennessee families are fortunate enough to have been able to purchase a home. Incorporating that property into a comprehensive estate planning package is important, as a home is often one of the most valuable assets held by a family or individual. However, the acquisition of real property after the owner's death can be a complicated matter.
If a piece of real estate is not placed within a trust, it will likely enter into the probate process. That can take a long time to complete, especially if there are any challenges or other obstacles to overcome. While the probate is going on, expenses related to the home will need to be paid through the trustee. These include maintenance costs, necessary repairs, utilities, insurance costs and the like. By the time probate is complete, the estate may be seriously depleted due to these expenses.
One way to avoid this outcome is to structure a life estate, which can benefit the homeowner during his or her life, as well as assist in the eventual transfer of the asset when the time comes. A life estate basically transfers ownership of the home at the time of creation. However, the original owner retains the right to remain living in the property for the rest of his or her life. At the time of death, the property immediately transfers to the named beneficiary.
This is just one approach that can help a family facilitate the acquisition of real property outside of the probate process. There are other options that might offer a better fit for some Tennessee families. The only way to know which choice is best suited for one's needs is to research the available options and weigh the pros and cons of each.
Source: marketintelligencecenter.com, "Proper asset titling: Estate planning and your home", Joe Favorito, Sept. 30, 2016