A family home is one of the largest assets that a person owns. The emotional ties to the home can dramatically increase the worth to heirs of an estate. Deciding how to include a home in an estate plan can be a complicated process. Working with an experienced estate lawyer can ensure that the home is passed down in the most cost-efficient way.
When a person dies and wishes to pass the family home onto a beneficiary, they can specify their wishes in their last will and testament. Upon death, the will must go through the probate process through the court system. The executor of the will must first receive a letter of testamentary confirming their position as executor, then supply the will to the surrogate in the probate office in the county where the deceased lived.
The surrogate reviews the validity of the will and confirms that it is legally sound. The deceased’s intentions in the will are processed and the home becomes the property of the beneficiary named in the will. Complications during the probate process often result in costly and long delays. When heirs contest the will or there is a legal issue connected with the estate, the process of probating can become arduous, and the value of the home can fluctuate during that time.
There are several ways that an individual can leave a home to beneficiaries, including:
Revocable Trust: A revocable trust allows an individual to control their assets and home ownership during their lifetime, and designate beneficiaries for their home at the time of death, with specific instructions on when the inheritor receives the property. In this scenario, the inheritor bypasses the probate process entirely. Most of the costs associated with this trust fall on the grantor, who must rely on the assistance of an estate lawyer to draw up the trust.
Transfer on Death (TOD) Deed: A TOD deed designates heirs to the property and does not require probate. TOD deeds are not available in every state and limit the grantor’s heirs to individuals and charities. A TOD cannot be included in a trust and offers no contingencies. This means that when you outlive an heir, the property does not automatically pass down to the heir’s children. In this situation, the TOD would need to be rewritten to include new beneficiaries.
Joint Tenancy or Community Property: When the title to your home is held in joint tenancy or community property with a right of survivorship, two co-owners are designated as equal owners of the property. The right of survivorship means that if one co-owner dies, their half of the property automatically goes to the other co-owner and not the family or children of the deceased’s beneficiary.
If you are considering an estate plan that includes your home, the Chester County wills and estates lawyers at Eckell, Sparks, Levy, Auerbach, Monte, Sloane, Matthews & Auslander, P.C. can help. Call us today at 610-565-3700 or contact us online to schedule a free consultation. Our Media and West Chester, Pennsylvania offices serve clients throughout Delaware County, Chester County, and Montgomery County.