After encountering multiple complex and heartbreaking estate issues this month, I just wanted to do a quick public service announcement and encourage any of you reading this to meet with an attorney to create or review your estate plan.
According to an AARP survey, two out of five Americans over the age of 45 do not have a will. I get how hard it is to look ahead and anticipate an illness or death, but when you don’t, everything is so much more complicated.
While every estate is unique, here are some questions to think through regarding your real property:
- How is your real estate titled? Is the property in a trust? Is the successor trustee reliable? Is the property owned solely or with another person? Does someone other than the person on the title occupy the property? Have you made any estate plan changes that are not reflected in the title?
- Does the property have a mortgage? Most mortgages have a due on sale clause and are not assumable. Consequently, if you pass away and leave the property to your children, the mortgage company can call the note due. This leaves heirs with three options: a) sell the property; b) refinance the property; or c) pay off the mortgage. Think through these potential scenarios in advance.
- Can the heir to the property afford the mortgage on his own, or will he have the necessary reserves to make the mortgage and utility payments until the property can be sold? We have seen situations where inherited properties have fallen into foreclosure, even though there is equity in the home. It takes time for estates to settle and assets to be liquidated, so the cash is not always available to the heirs to pay the mortgage payment.
- In the event you are incapacitated and the funds for your care are locked away in the equity of your home, is your home in sellable condition? In situations such as this, we work hard to get the very most money we can for a property. If the home has been neglected and tied up in an estate situation, it becomes harder for us to command those top values.
- Don’t forget about rental properties and vacation homes. Those real estate assets need a plan, too.
I have handled estate and probate situations for more than 15 years, and am well versed in all the intricacies as they relate to real estate. If you are handling the estate for loved ones, we have the resources in place to help you manage the process whether you live here or out of state.
This article is for informational purposes only and not for the purpose of providing legal advice. An attorney should be contacted for advice on specific legal issues.
John Karadsheh is the Designated Broker for KOR Properties. He has been a Multi-Million Dollar producing agent for more than 15 years, and is an Accredited Buyers Representative (ABR) and Certified Residential Specialist (CRS). In 2014, John was voted the No. 1 Real Estate Agent in Arizona by Ranking Arizona. You can reach John at (480) 568-8684, or visit his website at KORproperties.com.
KOR Properties is a boutique real estate brokerage serving the Valley of the Sun, as well as the creator and founding sponsor of Mesa Food Truck Fridays.