An estate plan allows an individual to manage and pass on their valuable assets, such as real estate. Property owners in Forney have unique concerns and considerations when developing an estate plan. As a result, a homeowner can benefit from having a checklist to assist them through the estate planning process. Some of the key considerations that Forney homeowners should review when creating their estate plans include:
Confirm Your Home’s Title Status
A Forney homeowner creating an estate plan should first confirm the legal title for their residence. An individual who lives alone may own their home solely in fee simple. However, housemates or family members who co-own a home may have the house titled as a tenancy in common or joint tenancy with right of survivorship, with the primary differences between both types of title including the fact that tenancies in common can have unequal ownership stakes and a joint tenancy with right of survivorship means that each surviving tenant automatically inherits a pro rata share of a deceased tenant’s interest.
Texas also operates under community property rules, which can complicate title status for married couples, even if only one spouse holds official legal title to the home.
Consider a Lady Bird Deed
Texas is one of the few states that allow property owners to create Lady Bird deeds. In Texas, a Lady Bird deed, also called an enhanced life estate deed, allows a property owner to deed a remainder interest in their home to a beneficiary while retaining a life interest for themselves. However, Lady Bird deeds differ from traditional life estates because they allow the property owner to revoke the deed, encumber, or dispose of the property during their life, giving the homeowner more flexibility than standard life estates. Furthermore, because Lady Bird deeds remove property from a person’s estate, they can potentially protect a home from Medicaid estate recovery.
Write or Update a Will
For many people, a home represents the most significant assets and source of wealth they own. As a result, Forney homeowners should ensure that they have an updated will addressing the disposition of their home after death. Without a will, a home will pass according to Texas’s intestacy laws, which could result in an unintended family member inheriting a homeowner’s property or dividing ownership interests in the home among multiple heirs – a scenario some homeowners may wish to avoid.
Review Beneficiary Designations
Some homeowners may purchase life insurance policies to have a death benefit that their family can use to pay off the mortgage on the home, alleviating the burden of continued mortgage payments should the homeowner suddenly pass away. As a result, homeowners who have life insurance policies or annuities should review their beneficiary designations to ensure any benefits or money intended to pay off their home after death remains available to the estate and their heirs.
Plan for Incapacity, Not Just Death
Finally, homeowners should also consider creating a durable power of attorney to authorize a spouse or a trusted family member or advisor to act on their behalf for property management purposes should the homeowner become incapacitated. A power of attorney can empower someone to handle property taxes or mortgage issues for an incapacitated homeowner.
Contact an Estate Planning Lawyer
If you own a home in Forney, you can benefit from experienced legal guidance to help you protect the wealth you’ve built in your residence with an estate plan. Contact Guest & Gray today for a confidential consultation with an estate planning attorney to learn more about the critical considerations that homeowners must work through when creating an estate plan in Forney.
