Keep your estate plan for real estate assets up-to-date. As life and laws change, strategic planning is crucial. Watch our video on Estate Planning for Real Estate owners or for those who prefer to read this information, you can find the full script below.
Real estate is an excellent way to accumulate wealth, but it is also illiquid. Most parents want to pass this wealth to future generations. However, without proper planning, your family might be forced to sell at a lower price due to liquidity issues or hefty taxes. Estate planning unlocks the most value for your family from your real estate investment.
Estate tax is our first consideration. The current federal exemption is $12.9 million for a single person, but it is going to decrease to $6 million after December 2025. In New York State, it’s even lower at $6.5 million. To maximize this generous exemption, act now. Various tools like grantor trusts and spousal access trusts can reduce estate taxes, ensuring your real estate passes smoothly to loved ones.
Probate delays and liquidity is our second consideration. If you die with assets solely in your name, they get frozen, regardless of whether or not you have a Will. In New York City, probate takes 1-2 years, causing issues like rent collection and property management. Who will collect the rent? Where will the money for taxes come from? The solution? Create a Trust. It works like a Will, distributing assets to your intended beneficiaries without a lengthy court process. Retitle your assets to the Trust during your lifetime for it to work as intended.
Control is our third consideration. Some owners want to minimize taxes while retaining property control. Others want the right person managing their properties posthumously. Good news: a properly structured Trust achieves all of this! It provides income, maintains control during your lifetime, and specifies who takes charge later. It’s a flexible solution tailored to your needs.
state planning for real estate is crucial and must be reviewed regularly. Laws change, families evolve, and life brings new opportunities and challenges. Even health changes can require adjustments. Act now. If you’re considering estate planning for your real estate, reach out to us at Sverdlov Law. Our experts guide you, preserving your real estate legacy and caring for loved ones. Time is of the essence, so don’t delay. A well-crafted estate plan secures your real estate wealth for generations to come.