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The certain ways to make sure your desired heirs get the house

Inheritance can be a tricky thing. You may think you can leave whatever you want to whomever you want but it is a bit more complicated than that. It is important that you take the time to create a fool proof plan that will make sure your kids get your most valuable asset upon your passing, usually residential property.

 

A no-brainer: Include your home in your will

We've all heard it: Having a valid, updated will is the single most important legal document to ensure your house will pass to your chosen beneficiaries. This may seem like a no-brainer, but it is surprising how many people assume their assets will automatically pass down to surviving family members. That may be true, unless the property gets tied up in a dispute among heirs and claimants. After all, real estate can be "cashed out" which may be more important to an heir who has no desire to retain and maintain the property. 

You can leave your home to one person or you can leave it to multiple people as well. The important thing is to make sure your wishes are clearly stated. When leaving your home to one person you will need to make sure that they are named in the will. If you leave the home to more than one person, each person will get an even share of interest, unless you clearly state otherwise.

With a will, your home will have to go through a probate period to give creditors a chance to come forward and lay claim to part of the estate. This means that for a period of time, generally six months, nothing can be done with the assets until that period is up. Though you may be able to name the person that is going to get your home, with a will they will have to wait.

And make sure the wording is legally airtight

It is important that your legal documents will stand up in court. That requires correct , clear wording describing your home and what you want to happen to it upon your death. You should include the words “Transfer on Death” or, “Join Tenant with Right of Survivorship”. The terms transfer on death means that when you pass, possession of the home will then transfer to the person that you have named after death. This type of deed will need to be legal in your state.

For those that are married perhaps or that do have someone that lives with them you may want to work with a joint tenant with right of survivorship. This means that if you die first the person that is left living in the home will then own the home.  This may be difficult for some as you have to ask the co-owner if you want to do anything in the home. 

Trusts, living and testamentary

Another thing you can do is to create a living trust. A living trust is something that you set up while you are still alive that names the person that the home will transfer to when you pass. A testamentary trust kicks in upon death of the trustor. This is beneficial in that your home will not enter into the probate with the rest of the estate. If you do enter your home into trust, you can make sure that your home is going to be transferred on your death so that it can be immediately dealt with.

Sell them the title

Increasingly, elderly parents are starting Medicaid planning by selling the house to an adult son or daughter who wish to keep it. To qualify for Medicaid in Arkansas, there are strict rules regarding the dollar value of personal assets a recipient holds. There is also Medicaid look back period of five years, meaning the state will look back at your financial dealings for the previous five years prior to your application.  

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