Real Property Transfers and Estate Planning
Real property transfers and estate planning go hand in hand, as transferring ownership of real estate is often a key part of the estate planning process. Whether you’re looking to transfer property to your children, donate it to a charitable organization, or use it to fund a trust, it’s important to understand the legal and financial considerations involved.
Below are the different ways to transfer real property in the state of Colorado. Hopefully these tips will help you create a comprehensive estate plan that protects your assets and meets your legacy goals.
Types Real Property Transfer Strategies
There are different strategies to consider when contemplating the transfer of real property in your estate plan. These fall under non-probate transfers and probate transfers. Let’s take a look at the non-probate first.
Joint tenancy: Joint tenancy is a type of co-ownership whereby two or more people own equal shares of a property. Upon the death of an joint tenant owner, the survivor automatically inherits. Joint tenancy ownership is common among married couples.
Trust: A trust is a legal arrangement in which a person, known as the grantor, transfers ownership of their assets to a trustee, who holds and manages the assets for the benefit of the trust’s beneficiaries. Trusts are often used to own real property. If you decide to use this method, you must transfer the property into the trust through the use of deed. And, the deed must be recorded with the clerk and recorder where the property is located.
Beneficiary Deed: A beneficiary deed is a document allowing a person to specify who should receive their real property after their death. The county clerk records th beneficiary deed with them for it to be valid, similar to the trust option above. The property transfer occurs when an affidavit and the owner’s death certificate is filed with the county.
Tenants in Common: This type of property ownership is when two or more individuals hold an undivided interest in the property. The interests need not be equal. Each tenant in common holds an individual and distinct ownership interest in the property. And each has the right to use and possess the entire property. Tenants in common can transfer or will their interest in the property to anyone they choose. The new person then becomes a tenant in common as well.
Will: A will is a legal document outlining how a person desires how their property and assets a distributed after their death. In a will, a person can specify who they want to inherit their real property.
Intestacy/Probate: If a person dies without a will or other estate planning documents in place, their real property may need to go through probate to determine how it should be distributed. Colorado’s intestacy laws will become your plan for you if you decide not to use any of strategies listed above. This do nothing option is the most costly and time consuming for family members of the property owner.
In conclusion, estate planning and the transfer of real property doesn’t have to be complex or overwhelming. It’s essential, however to ensure your assets are protected and distributed according to your wishes.
If you’re having trouble on decided how to transfer your property, schedule a free consultation. Don’t wait until it’s too late, start planning for your estate today.Follow me on social media: