What real estate investors need to know about Real estate planning

What real estate investors need to know about estate planning. Planning ahead is always important. And real estate investors shouldn’t even think about dying without a real estate plan.

Why? A real estate plan is a legal document that dictates how a deceased person’s money and other assets will be distributed when they head to the afterlife. Deciding these matters in advance is what is best for them and their heirs.

What is estate planning?

Succession plans are key to making sure family members are taken care of in the event of death. Dying without a plan, and without instructions will create difficulties for that person’s heirs. Even if someone has no children or relatives, there is likely a charity that would rather benefit from their life’s work than the United States government.

What is estate planning?

Consider what happens when someone dies without a clear estate plan. The heirs are stuck waiting while the executor, the accountants, the lawyers, and Uncle Sam have their way in court. Of course, all those parts are paid immediately. Meanwhile, the family will wait months or years to decide how the deceased’s assets and possessions will be distributed, with no guarantee that he will get what the deceased wanted him to have.

Advantages for real estate investors

A proper real estate plan is vital for everyone and can manage investments, debts, and earnings when a person cannot and cannot manage them. A plan created by an experienced estate planning attorney with real estate experience can help in these ways:

Avoid succession. Succession is the legal process in which the validity of a will is tested. Some people believe that only one will is enough, but this is a myth. A will must go through probate court, a miserable and emotional experience for everyone involved.

An executor is in charge of starting this process, usually through an attorney, and will get the will approved by the court. The executor of the will can be chosen and appointed in the will; otherwise, the court will appoint one.

What real estate investors

When there is a business that will outlive the customer. Depending on the type of real estate investment business, it’s fairly easy to make sure you outlive the client by using structures like the series LLC, with its potentially unlimited life. A living trust in combination with a “will transfer” (more on this later) can easily transfer ownership of a business.

profitable real estate portfolio

When there is a profitable real estate portfolio. As an added benefit, when assets are transferred to heirs over the age of 18, they get asset protection and creditor protection benefits. Give to charity. The property and wealth of the deceased are divided between charitable or philanthropic acts.

Keeping control. Stop Uncle Sam (i.e. The state the deceased lived in) from getting his greedy paws on the decedent’s life earnings and dividing them as he sees fit. Avoid inheritance taxes. State estate taxes can reduce the amount that beneficiaries receive. Smart estate planning works to prevent

Any real estate investor knows the importance of planning ahead. If supporting family and others is an investment goal, the best thing to do for those heirs is to become familiar with estate planning.

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