Property ownership is not always direct. While many traditional homeowners take out a mortgage and eventually buy their homes, there are many alternative models as well. Homeowner associations and condominiums provide individual ownership but with group commitments. A vacation home or timeshare operates in a similar manner. A business owner may own real estate and share the business entity located on that land, or perhaps a partnership or LLC split the responsibility.
Because there are so many different models of ownership, it can be challenging to simply sell or change the name on the deed. Every agreement or statement of ownership has its own terms, and different states have different laws as well. When a property owner passes away, it is important to have an estate plan that shares or sells your property in a way that your next of kin aren’t stuck with unnecessary expenses.
A timeshare example
Many Florida residents enjoy a beach getaway or even leave the state for timeshare vacations elsewhere. It’s an easy way to have a familiar escape and a sense of ownership without the hassle of maintenance. While there are many pros to timeshares, there are also cons, including transferring ownership. In some agreements, the maintaining resort will pressure heirs to take over a property they do not want.
A recent article by the Associated Press gives three basic tips to limit probate confusion with a timeshare:
- Do not make a permanent agreement.
- Do not put children’s names on the deed.
- Allow heirs the capability to disclaim the property.
The article sites two protective parents who created a trust to make sure their children do not inherit a burden they do not want. While the author does not feel a trust is necessary in this specific example, any contract is all about the fine print.
Putting the terms in your favor
Estate plans such as a will or trust are an ideal way to make sure that your property does transfer the way you want it to, without unnecessary financial burden or stress on your loved ones. That includes the fear of leaving unwanted property to the next generation.
Every deed contains caveats about transfer of property, whether through sale or at time of death. If the fine print is likely to create extra expenses and headaches for loved ones, it may be possible to override these challenges with a carefully written estate plan. Property located in another state is especially challenging at probate. Probate can be an exhausting and emotional experience. The well-crafted estate plan will make it flow more smoothly and protect both the value of your property and the state of mind of your loved ones.