by Legacy Plan Apr 25, 2017
Summary: Estate planning, like many legal matters, is something where there are many ways to accomplish any given goal. Just like meeting any legal, financial or medical need, there are techniques that are safe and reliable, and there are methods that are risky and filled with potential dangers. There are many techniques involving deeds that can transfer real property without requiring probate, but some of them can also cost you or your family thousands in taxes or, worse, cause you to lose the property completely. By working with a knowledgeable estate planning attorney, you can achieve your goals of avoiding probate without putting your home or other property needlessly in jeopardy.
When we have medical issues, we usually go to a doctor to obtain treatment that we can trust is reliable and avoids risky methods of addressing the problem. Consulting an attorney for a legal matter, such as an estate planning need, works similarly.
Your estate planning attorney can help you go about addressing your need in a way that you can trust. This type of help in planning can be essential because, for
every trustworthy way to meet your needs regarding avoiding probate or accomplishing other objectives, there are as many unreliable traps that can ensnare your estate and your family in a mess that may cost considerable time and money to fix or,
worse, lead to an outcome that is different from what you wanted.
With that in mind, here are a just a couple risky probate-avoidance methods that are examples of potential traps that can exist for you:
In some states, if you still have a mortgage on the property, adding someone to the deed can require you to pay a certain type of real estate transfer taxes on one-half of the outstanding balance of the mortgage. This can potentially amount to thousands
of dollars in taxes. Another massive problem that can arise after using this method in some states is that it can cause your property to lose its homestead exemption. Losing a homestead exemption can potentially raise your annual property tax
bill by thousands of dollars.
Also, adding your deed makes your beneficiary more than just a silent co-owner during your lifetime. That person has all of the same rights you do. You cannot sell the property, refinance the property or take out another mortgage on the property without
the approval of your new “co-owner.”
This article is published by the Legacy Assurance Plan and is intended for general informational purposes only. Some information may not apply to your situation. It does not, nor is it intended, to constitute legal advice. You should consult with
an attorney regarding any specific questions about probate, living probate or other estate planning matters. Legacy Assurance Plan is an estate planning services-company and is not a lawyer or law firm and is not engaged in the practice of
law. For more information about this and other estate planning matters visit our website at www.legacyassuranceplan.com.