Estate Planning and Real Estate: What to Know This Year
Welcome to the new year! With each new year comes new goals, aspirations, and plans. For many, one of those plans includes estate planning and real estate. It’s an important topic to discuss, especially with the ever-changing laws and regulations surrounding both estate planning and real estate. In this article, we’ll dive into what you need to know this year when it comes to estate planning and real estate. From updates in laws and tax codes to changing trends in the real estate market, we’ve got you covered.
Understanding Estate Planning
Estate planning is the process of arranging for the management and disposal of your assets after you pass away. This includes your personal property, real estate, and financial assets. In order to ensure your wishes are carried out and your loved ones are taken care of, it’s crucial to have an estate plan in place.
Updates in Laws and Tax Codes
One of the most important reasons to review your estate plan this year is due to the changes in laws and tax codes. Estate planning laws are constantly evolving, and it’s important to stay updated in order to protect your assets. The Tax Cuts and Jobs Act that went into effect in 2018 brought about significant changes to estate and gift tax laws. The federal estate tax exemption has increased to $11.58 million for individuals and $23.16 million for married couples. This means that fewer estates will be subject to federal estate taxes.
However, there are still many state laws to consider when it comes to estate planning. Some states have their own estate tax, which may have a lower exemption limit. It’s important to work with an estate planning professional who is familiar with the laws in your state to ensure your estate plan is fully compliant.
The Impact of Real Estate in Estate Planning
Real estate is often a significant part of an individual’s assets, making it an important factor to consider in estate planning. There are several ways that real estate can be included in your estate plan:
Titling of Property
The way in which you hold title to your real estate can have a significant impact on your estate plan. Joint tenancy with rights of survivorship is a common way for spouses to hold title to their property. This means that if one spouse passes away, the remaining spouse automatically inherits the property. However, in some states, this could lead to potential tax and title issues. It’s important to review how your real estate is titled and make any necessary changes to ensure it aligns with your estate planning goals.
Transferring Real Estate to Heirs
Transferring real estate to your heirs can be a complex process. In order to avoid potential disputes among heirs, it’s important to have a clear and detailed plan in place. Depending on your goals and personal situation, you may choose to transfer the property directly to your heirs, put it in a trust, or sell it and distribute the proceeds. Each option has its own benefits and drawbacks, and it’s important to discuss them with your estate planning professional.
Trends in the Real Estate Market to Consider
The real estate market is ever-changing, and it’s important to stay informed when it comes to your estate planning. Here are some current trends to keep in mind:
Interest Rates and Mortgage Rates
In recent years, interest rates and mortgage rates have remained relatively low. However, these rates are expected to rise in the coming years. This could impact the value of your real estate and any potential rental income that you may receive. It’s important to monitor these trends and consider them when making decisions about your real estate assets.
Demand for Properties
The demand for residential and commercial properties varies depending on location and market conditions. This can have an impact on the value of your real estate assets. It’s important to keep an eye on market trends and consider them when reviewing your estate plan.
Seek Professional Guidance
Estate planning and real estate can be complex and overwhelming topics to navigate on your own. It’s crucial to seek guidance from a qualified estate planning professional who can assist you in creating a plan that aligns with your goals and provides peace of mind for you and your loved ones.
In conclusion, estate planning and real estate are two crucial elements to consider in the new year. With ever-changing laws, tax codes, and real estate market trends, it’s important to review and update your estate plan to ensure your assets are protected and your loved ones are taken care of. Seek professional guidance to create a plan that fits your unique situation and goals. Here’s to a successful and well-planned year ahead!
