During estate planning, people try to provide for their loved ones and protect their valuable resources. Many testators establishing their initial plans focus on protecting specific assets.
The primary residence of the testator may be their most valuable possession. They may want to ensure that the right party inherits the home. There are three types of estate planning paperwork that could theoretically help people protect their homes and better ensure that they pass to the right party.
1. Wills
A will is the simplest testamentary instrument, and it is the most common as well. Many people only ever draft wills. A will can name a beneficiary to inherit the home where the testator lives after they pass.
2. Deeds
Some testators choose to take on a co-owner before they die to protect the other person’s interest in the property. Others might draft transfer-on-death deeds as a means of transferring ownership after they die without giving up their control of the property while they are still alive. Both options can work in different circumstances.
3. Trusts
When people own homes worth millions or have unique family circumstances, they may want to transfer ownership of their homes to a trust. Trusts can allow certain people to live in the home indefinitely without granting them the right to use it as collateral for a loan or to sell the property. Trusts may work well in blended family scenarios. They are also useful for individuals concerned about estate taxes, creditor claims or Medicaid estate recovery efforts.
A home is a valuable asset that may require special consideration during the estate planning process. Discussing family circumstances and legacy goals with a skilled legal team can help homeowners choose the right legal instrument for their situation.