Many families have an out-of-state cabin or vacation home that’s passed down by putting the property in a will. While that’s an option, this strategy might not make it as easy as you think for your family to inherit this home in the future.
Florida Today explains the reason to look into a more comprehensive plan. While you could just leave an out-of-state vacation home in your will, you might consider protecting your loved ones from the often expensive, overwhelming and complicated process of dealing both an in-state probate and an out-of-state probate.
Probate is the legal process where a will must be proved to be valid in court, which can quickly become time-consuming and expensive, especially when dealing with ancillary probate (probate outside of one’s home state). There are options to help avoid probate on an out-of-state vacation home that can save your family headaches in the future.
Ways to Avoid Probate on Your Vacation Home
- Revocable trust: This type of trust can be altered while you’re still living, especially as your assets or beneficiaries change. You can place all your assets into this trust, but at the very least, put the vacation home in the trust to avoid the property going through probate. Another benefit of a revocable trust is you could set aside money in the trust specifically for the management and upkeep of the property, and you can leave instructions on how the vacation home should be managed upon your death.
- Irrevocable trust: similar to the revocable trust, assets can be put into an irrevocable trust, including your vacation home. You can leave instructions and money for the management of the vacation home. However, once an irrevocable trust is established, you can’t amend or terminate it.
- Limited liability company (LLC): You can also create an LLC and list your home as an asset of the company to eliminate probate and save you or your family from the risk of losing any other assets outside of the vacation home, if sued. You can protect yourself if renting out a vacation home and the renter decides to sue. The most you could then lose is that property, rather than possibly losing any other assets. With the creation of a limited liability company, you’re also able to create a plan to help with the future management of the vacation home.
- Deed Transfer: While it simplifies the process of transferring the property to someone else, when you have multiple children, issues may arise when making decisions surrounding the home. Most issues usually come from not explicitly writing your wishes for the management of the house in detail.
- Joint ownership: You can hold the title to the property with another that’s given the right of survivorship. However, like with the deed, this can lead to miscommunication as to how the house should be cared for and used.
So what’s the best move for optimal protection of your out-of-state vacation home? An estate planning attorney is the answer to make sure you get the answers to your legal questions and enhance the protection of your assets beyond just your vacation home. Asset protection is a vital part of estate planning, and it’s the reason most adults start their estate plan.
Estate Planning is for Every Family and Individual
A recent study found that the wealthier the individual, the greater the likelihood that they had estate planning documents in place. It’s a common belief that only the wealthy or older individuals need an estate plan in place. The problem with this false belief is that estate planning is for everyone, no matter the stage of life or income level. Your assets need protection for whenever the unthinkable happens and you and your family no longer have a voice.
Save your family the trouble and legal headache awaiting them whenever the unfortunate happens. Prepare for your family’s future with Ozarks Legacy Law to help make certain that your property continues to be a place where cherished memories can be made for years to come. Talk to a qualified estate planning attorney for expert legal advice for your specific situation.