If you own property, naturally, you probably plan to pass the property to a loved one. While this gesture is a good one, just how smooth the transfer of ownership goes largely depends on what you do as you prepare the estate plan. Make sure you know what to do if you plan to leave behind the property. 

Never Assume

It is easy to assume that when you pass away, all your belongings will automatically go to your closest living relative, but this is not how the law works. From a legal standpoint, properties, and other assets are delegated based on the will. If there is no estate plan in place, the state makes the determination through probate.

The probate process can be incredibly stressful, costly, and lengthy. For this reason, you should never make any assumptions about how your property will be passed on after your death. You want to sit down and plan with an attorney to ensure everything happens as you want.

Have a Conversation

Have a conversation with anyone you are thinking about leaving the property to. You want to ask if they want the property and if they do, what do they think they will do with it. This type of question is important because it helps determine how you should handle the transfer process. 

For example, if the person who inherits the property plans to sell it right away, they may have to pay taxes on the profits from the sale at a higher rate than you would if you sold the property. In this case, the better plan might be to sell the property now and put the money away for your loved one.

Consider a Trust

In terms of taxes, another issue your loved one could face is gift taxes, which are based on the value of the property or other inheritance. There is a set limit each person can receive yearly, and throughout their life. Generally, the value of a home far outweighs this amount.

One way to avoid this concern is to place the property in a trust as part of your estate plan. With this option, the property is transferred to the person you want, but they can avoid the gift tax implications.

Remember, it is helpful to get assistance with estate planning. Be sure to speak with a probate attorney who can help you make the process as easy as possible for your loved ones.