“You want to set up your heirs for success, not failure,” is the way Justin Flach of Ascent Private Capital Management puts it to property owners, cautioning that “real estate is different from most other kinds of inherited assets.” If properties carry mortgages, that will affect the value of the estate, he notes. What’s more, “repair and maintenance costs, along with property taxes, can turn property ownership from a blessing to a burden.” He recommends setting aside funds in a trust dedicated to helping heirs pay for those expenses.
While your estate includes all the property you own, we remind our Geyer Law estate planning clients that real estate is an illiquid asset, and, for that very reason, it’s important for them to consider how each of their heirs is likely to be affected. As Flach so aptly tells parents, “First you have to determine whether your heirs want to receive the property or not.” Our attorneys agree the key to avoiding post death dispute and bitterness among heirs is to hold family meetings ahead of time, communicating the parents’ intentions and the reasoning behind them, and we often help facilitate and moderate those discussions.
Another factor that must be considered in estate planning is that when an inherited property turns out to be contaminated, the liability can be inherited along with the property itself. At Geyer Law, in order to make sure our estate planning clients – and their heirs – are on “safe ground” when it comes to environmental risks, we encourage owners to consider having site assessments performed if there is a possibility of environmental issues.
At Geyer & Associates, we believe a well-crafted estate plan should provide for loved ones in an effective and efficient manner, minimizing headaches and delays. Still, it sometimes happens that property has already passed to the next generation, with the heirs coming to us for help regarding the valuation and taxation of property interests.
If real estate is a big part of your estate, it needs to be a big part of your estate planning!
– by Rebecca W. Geyer
