Wills, Trusts & Estates Prof Blog

Editor: Gerry W. Beyer
Texas Tech Univ. School of Law

Tuesday, July 1, 2014

3 Steps to Creating a Successful Estate Plan

Passing down

Real estate can be passed down from generation to generation and often carries with it a sentiment value beyond money.  Yet handing down a major asset is far from simple.  This is why it is so important for property owners to plan in advance and communicate closely with their family members to develop a comprehensive estate plan.  Here are three steps to help guide your planning:

  1. Keep Open Communication.  By communicating with family members and maintaining close contact with financial advisors, families can remain in control and diffuse potential tension.  An attorney can also help families manage real estate inheritance. 
  2. Assess Your Tax Situation.  Taxation can be tricky when passing down your home, especially for high net worth individuals.  “There are different planning and tax considerations for these groups . . . High and ultra high net worth individuals may need to set up trusts called Qualified Personal Residence Trusts (QPRTs) to discount the value of their estates.”  You want to compare the effect of passing the house to children through your estate, versus the costs and benefits of gifting the house to a QPRT.
  3. Plan a Maintenance Fund.  To ensure that family homes are well-maintained, parents must also develop a plan to help their children and future generations finance repairs and other unforeseen maintenance expenses.  “When it comes to real estate, you need liquid dollars to finance the upkeep.”

See Ritika Puri, Passing Down Your Home? 3 Steps to Creating a Successful Estate Plan, Forbes, June 30, 2014. 


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