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Accounting for real estate in an estate plan

On Behalf of | Dec 3, 2023 | Estate Planning

As with other assets, you have the right to transfer your interest in a Maryland home to a chosen beneficiary after you pass away. However, there are a number of issues that you might need to consider when including real property in your estate plan. For instance, you may need to resolve tenant issues or leave additional money for maintenance and upgrades.

If you’re renting the house

Typically, a lease remains in effect even if a home is transferred to a new owner. Therefore, if a tenant had just signed a lease that doesn’t expire for 12 months, that person typically has the right to remain in the house. Furthermore, the estate would need to live up to its obligations as a landlord until the property is officially transferred. If the home is kept in a trust, it may be a good idea to leave money to hire a property management firm to help your child or grandchild be a good landlord until a lease expires.

The home will need to be maintained

Even if your estate plan says that your house will be sold, it can still take months or years to complete the transaction. In the meantime, your heirs will need money to maintain, upgrade or showcase the property to potential buyers. Additional funds for upkeep, mortgage payments and other costs will also be needed if your heirs keep the home, so you’ll need to provide them with a financial cushion either way.

Accounting for as many variables as possible may make it easier to settle your affairs quickly and avoid family conflicts after you pass. Ideally, you will review your estate plan once a year to ensure that you’ve accounted for as many issues as possible and can make changes in a timely manner if necessary.