There are times in life when we feel we could live forever and we have felt indestructible, (like when you enlisted in the armed forces way back when) never realizing that no one is taking anything with them, when they pass.
It may seem a bit morbid, but the fact is, we are all going out exactly the same way, just the way we came into this world, with absolutely nothing except with a suit or a dress, depending on how we go!
However, we may come into this world with not a dime, but a portion of us, will leave behind not only a legacy of memories, but maybe some substantial assets, which most likely will include Real Estate.
Some will setup Living Trusts (while you are alive you will control all your assets).
A revocable living trust can be changed anytime during your lifetime.
After you transfer ownership of various or all your assets to your trust, you can serve as the trustee on behalf of beneficiaries you designate (when you pass a Successor Trustee will handle everything, as long as everything is within your Revocable Trust. If anything is left out, then they (another name given today is “Your Personal Representative” as opposed to Executor or Executrix) will have to probate in court, those items left out when you pass, to get them into your Revocable Trust that you had previously setup.
Provided you do so, there may not be any ongoing fees.
But most important are a multitude of things that one must and should do in advance as preparation for when that time comes when you are either no longer capable to manage your affairs or you have passed.
This process will surely make it much easier for your children or heirs, assuming you want to pursue this path. I have seen a few individuals who do not care one iota about what happens when they pass and leave a huge pile of paperwork and complications.
If your affairs are not in order, not having a Will could possibly cost your estate more than what it is actually worth on paper.
One must ask oneself, does one want to leave any more than one has to, of your assets and money to the I.R.S. or State Coffers? Your family will be better served and know how to allocate and spend your estate hopefully better and more efficiently than the government!
Another two documents that are also extremely crucial to filled out and filed are the following:
1. A health-care document to be filled out in advance, a durable health-care power of attorney form as well as possibly
2. An Authorization to Release Healthcare Information form.
Without the first and/or the second form your Personal Representative may have to go into court to get a guardian appointed costing your estate more lost time and delays and dollars.
The following are links to two articles that will provide you with a cornucopia of information and guidance to assist and help you get started:
Proper documents showing ownership of your primary residence and all investment properties should be readily available as well as your all important Will, to whomever will be your administrator while you are alive and/or your Personal Representative (executor (male) or executrix (female).
Seek out professional advice with respect to how you have your Real Estate Portfolio setup, to make sure it is strategized in the most advantageous way, so the least amount of Estate Taxes will have to be paid.
Should it be in a Living Trust, what type of corporation is each property setup within?
Are you children officers of any of your corporations that your real estate investments are titled in?
Rock Star David Bowie, who recently passed away on Jan. 10, had a will and his estate was worth approximately $100,000,000.
Can you imagine if his will and all the necessary paperwork were not setup in the proper fashion, what the tax consequences would be to his wife, Iman and his son and daughter.
If you are planning a divorce or are in a middle of one, I am sure most will or have secured advice on how to handle assets, such as real estate.
Lately, I have seen Prenups, for those that have been married before and want to protect what they have built up and want to be in a secure position with what they have owned before marrying for a second or third time.
Just be careful on how you handle it, because “money and assets” can be the root of all evil.
There is a saying that I have heard from a few individuals in the past, that you marry first for love and second for money, this goes for males as well as females.
Marriage is a real honest to goodness business, and I celebrated my 40th anniversary in December, and my wife deserves half of what we have, for putting up with me and me putting up with her, LOL.
It’s cheaper to keep her! (only kidding Irene)
All Kidding aside, just beware and prepare for the inevitable of passing or divorce.
Philip A. Raices is the owner of Turn Key Real Estate in Great Neck. He can be reached by mail: Phil@TurnKeyRealEstate (WWW.Li-RealEstate.Com) or by cell @ (516) 647-4289.