Real Estate Property Transfers: How to Pass Real Estate To Your Heirs

By: Janice Dantes

 

Real Estate is the typically single largest purchase most people make in their lifetimes. Despite this fact, many people, especially Filipinos, do not do any estate planning to effectuate a transfer to their heirs. Below are the most common ways property can be transferred at death.

Joint Ownership. One way property can be transferred to a loved one is through joint ownership. If a property is owned in joint tenancy or tenants by the entirety, there is a right of survivorship. Upon the death of one of the joint owners, the property will pass to the survivor. While this is generally a simple process, there are some challenges. For example, if the property has a mortgage, the bank will likely seek to have the other owner also hold the mortgage. This could pose challenges if you are seeking to add your son or daughter and their credit score could impact your interest rate. Further, joint ownership could expose you to the creditors of your joint tenant. Be sure you trust your joint owner.

Transfer in Death Instruments. Another option in Illinois is the transfer on death instrument. This is a document that operates similar to a trust which allows a property to transferred directly to a beneficiary without probate. This is a great option for people with only one property. The challenge with this is that the name of the beneficiary is public since the transfer on death instrument does have to be recorded. Trusts.

Trusts are a great tool to transfer property to heirs. The advantages are privacy and if the trust is a revocable living trust, they can be amended easily. A trust also allows property to be transferred without probate. The challenge with trusts is that there are several variations of trusts so you will have to do some research to determine the right trust for your family. Further, properly funding the trust can be difficult, time-consuming and expensive.

While property can be transferred through a will, a will does not avoid probate. Also, if you own property outside the United States, you will need to ensure that you abide by the laws and requirements in the other country.

If you are seeking information on the best options to transfer property, please visit pinaylaw.com or call 312-546-5077.

Thank you for reading. Until we meet again, love one another.