Tuesday, August 14, 2012
In many cases, a trust is the better way to hold real estate for tax benefits and probate avoidance. We just had an elderly client move her property into a trust so that the aforementioned benefits can be achieved. With the right tax planning - and rest assured that I am NOT an expert in this at all - your heirs can receive far more than what would be left them if no planning is involved. Also, aside from tax liability, is the issue of when control over a property will occur. If a property - such as your rental fourplex - needs to go through the probate process, who will manage it and the tenants? Can a mismanaged building deteriorate in value over a few months? Yes, of course this is true. Trust planning, insurance, checking your loan costs, preventative property maintenance - these may not be fun parts of owning an investment property - but they yield great benefits when done correctly. Your internal rate of return relies heavily on these important aspects of ownership. Call me for great professional recommendations to experts in any of these areas.