Estate Planning Considerations for Property Owners



When you’re a property owner, including personally or you own property as a real estate investor, there are certain things to keep in mind when it comes to estate planning. Many of the considerations vary based on the state you live in, but some general tips can be helpful to property owners in any state.

First, it’s important to know that real estate often does go through probate, but there are options to avoid this.

The following are things to keep in mind regarding real property and estate planning.

Including Real Estate Assets In Estate Planning

Unlike other valuable possessions, there are ways to prevent real estate from going through probate, and that’s often the objective for homeowners and real estate investors. Some of these general options can include joint ownership and trusts. There are also transfer on death deeds.

In making these decisions, it’s important for real estate investors and property owners to think about how beneficiaries could be impacted if they were to inherit real estate. For example, beneficiaries might be responsible for capital gains taxes if they ultimately sell real estate property left to them.


One good option for real property owners who want to protect their beneficiaries is called a QPRT. QPRT stands for a qualified personal residence trust, which takes property out of the estate so federal estate tax can be avoided. If it’s for personal use, a person can continue living there for a certain amount of time.

Of course, the even simpler options for a lot of property owners is to name a joint owner of the property. In this case, it would pass directly to the second owner.

There are transfer on death deeds as well so that a beneficiary can be named, and it’s immediate and for the most part, outside of probate.

Check Your State Laws

While the above can be general tips, there are some things to think about, especially when it comes to state laws. For example, if you were to go the joint ownership route with someone you aren’t married to, it’s called tenants in common in some states.

If one of these owners dies, the ownership doesn’t go to the other owner. Instead, it goes through probate and to the heirs of the owner who died. In a state like this, sometimes the property may need to deeded as a designated property ownership with joint tenants. Both tenants should be named as having the right of survivorship.

For some situations, creating a trust can be best. The trust can then be created in the name of the beneficiary or beneficiaries you want to name. This can create better tax advantages, and also the property will pass outside of probate.

Regardless of the state you live in, as a real estate investor some major things to think about include avoiding probate and also putting in place an estate plan that’s not going to burden your beneficiaries too heavily when it comes to taxes