There are many times in life when you may need to be making changes to your estate planning documents. Expanding families, marriage, divorces, starting new businesses and moving to new states are just a few.
An important opportunity for updating your estate plan relates to real estate transactions. Real estate may represent some of the highest value property that you own. Changes in ownership and financing can have a big impact on your estate.
Real estate in business
Are you buying or selling real estate for your business? That may also mean that the size and value of your business is changing. Any time that there is a significant change in the value of the assets in your estate, is a time to consider reassessing your estate plan.
Real estate transactions may impact the growth of a business. Perhaps you will need to reconsider your beneficiaries and who is most capable of handling a now-growing company. If you are reconsidering your plans to dissolve or sell the business when you die, you may want to consider passing it to a beneficiary now or over time. In addition, the changing value of your business real estate may also create an unintended uneven distribution of assets among your beneficiaries.
Personal real estate
When you are buying or selling your primary home or a vacation home, it is a time to reassess how it is to be dealt with in your estate plan. Whether you are moving to another region or a vacation area, or if you are downsizing or moving to an elder care facility, these changes have tax consequences and It is an opportunity to consider what outcome is fair, financially equitable and practicable among your beneficiaries.
As you consider how your real estate transaction may affect your estate plan, it can be helpful to have appraisals of your assets that can help inform your decisions. This includes considering the value of property and the tax impact that inheriting a piece of real estate can have.