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Why a Will Won't Save Your Home From Probate
This video explains why a will may not be sufficient to protect your home from the probate process and introduces the Transfer on Death (TOD) deed as an alternative. It explores the benefits of TOD deeds for maintaining control over property, maximizing tax advantages, and avoiding common estate planning pitfalls.
By American Money 101
Key Takeaways
- •A will does not automatically bypass the probate process for real estate.
- •A Transfer on Death Deed allows property to pass directly to heirs while keeping the owner in full control during their lifetime.
- •Adding children to a property deed prematurely can lead to unintended tax consequences and loss of control.
- •Properly using a TOD deed preserves the step-up in tax basis, which can save heirs significant money on capital gains taxes.
- •Consider the interplay between real estate transfers, Medicaid eligibility, and whether a living trust may be more appropriate for your needs.
Why It Matters
Understanding how to properly pass on your home can prevent your family from facing expensive court delays and unnecessary tax burdens after you pass away. Proactive estate planning ensures your assets transition smoothly according to your specific wishes.