There are many things to consider when creating an estate plan. Designating how you want your property to distribute after you die makes things less stressful for those you leave behind.
Owning real estate is a major responsibility. Before passing your real estate investments on to your children, find out if they even want the property. If the investment is a rental property, find out if the new owners have any interest in being landlords.
Options to pass down property while you are still living
You could choose to sell or gift real estate investments to your children while you are still living. If you sell the property to your children, you must sell it at fair market value compared to other similar properties. Another option is to give the property to your children as a gift through an irrevocable trust, but this option comes with complicated tax implications.
Options to pass down property after your death
If you want to retain ownership and control of your real estate investments until your death, you could put the property into a revocable living trust and name your children as successor trustees. This is also an excellent option if none of your children want to take on the responsibility after your death because you can dictate that the trust sell the property after your death and distribute the proceeds. You can also simply bequeath the property to your children in a will.
One of the easiest ways to pass down real estate investments is through a revocable transfer-on-death deed. Similar to bank accounts that directly transfer as payable-on-death, real estate can directly transfer with a transfer-on-death deed. This deed allows the property to transfer without going through probate.