Assets such as an Arizona home may be transferred to your heirs at the time of your death. You may also choose to sell the home or transfer ownership of the property while still alive. Your decision will likely depend on factors such as family dynamics or the tax treatment of a sale or transfer.
Where will the home be held?
If your home is held within your estate at the time of your passing, it will likely be subject to Arizona probate rules. However, if it is included in a trust, the document itself will determine who gets the asset and when it should be transferred to a beneficiary. The trust may even stipulate that your child or grandchild is the official owner of the home while you have the right to live there until your death.
Pros and cons of a trust
Placing a home in a trust may be ideal from an estate planning standpoint because it may protect it from creditor claims. It may also prevent the home from being taken as part of a divorce settlement. One of the potential pitfalls of a trust is the upfront expense of creating it. It may be possible to place a beneficiary on the title to the house, meaning that a child, grandchild or other party would inherit it without additional documentation.
What to consider before selling the house
As with any real estate transaction, you’ll want to make sure that there is sufficient equity in the home prior to selling it. You should also account for the proceeds in your estate plan as it may be part of your estate if you don’t gift it or put it in a trust prior to your death.
Creating an estate plan today may make it easier for loved ones to carry out your affairs after your passing or if you become incapacitated. This may ensure that your home goes to the right person without a lot of drama.