How Should I Own My House? – Part 2
The decision as to how to title property has significant implications for estate planning. Title is the legal structure under which your property is owned and there are many benefits and drawbacks to the different options available to property owners here in California. In part one if this blog series, we discussed sole ownership and joint tenancy with a right of survivorship. While joint tenancy may make sense for some spouses, there are some other titling options which can be more effective for estate planning purposes.
Title in a Trust
An often recommended option here in California is to own your property in a trust. The ability to control the property depends on the nature of the trust but a popular form of trust is a revocable trust in which you can name yourself as both Trustee to maintain control. Trusts are useful tools for the ownership of property because upon your death you can avoid probate court and the trust document will dictate what happens to the property. Primary residences can usually be transferred to a trust even with a mortgage but banks may have more cumbersome requirements for other types of property. In the case of a primary residence, we typically recommend the use of trusts to own property in California.
Title by Limited Liability Company (LLC)
One last option to discuss is the titling of property through an LLC or a Limited Liability Company. LLC can be popular because they can provide a measure of protection from creditors and the transfer of the property is governed by the operating agreement of the company. Shares of an LLC can be transferred by way of estate planning documents. Additionally, some people choose to own vacation homes through the use of LLC’s to shield their other assets in the event of a lawsuit. LLC’s require more work at set up but can be a valuable tool for the ownership of property.
If you are considering purchasing a property, contact the team at Kushner Legal today to schedule a consultation to discuss the impact of the potential purchase on your estate planning needs.