A majority of Americans, including here in Florida, do not have a will or basic estate planning essentials. Part of the reason is the apparent urban legend that says estate planning is solely for those wealthy individuals who have substantial assets. Many people, however, forget about their family home, which can be a significant asset if the mortgage is paid down or paid off. In that event, estate planning can prevent the common discord that sometimes occurs between heirs after the parent or family member dies.
Checking accounts, investment accounts and the like have a clarity about them that makes them subject to an equal division among the heirs, at least in many cases. The home, however, usually ends up being the focus of any dissension in the family that may exist when the owner dies without estate planning. Therefore, when one meets with an estate planning attorney, one topic of importance will be what happens to the house when the owner dies.
If there are vacation homes, the same need applies. Many questions may come up when deciding how to handle the house. There are potential questions of mortgage or equity loan payoffs, taxes, repairs, upkeep, and the family dynamics that are likely to occur after the owner’s death.
The home carries a more personal insignia and some children naturally tend to feel that favoritism has played a part when the proper planning is not executed. The issues are best taken care of while the owner is alive. Discussion during life can achieve a consensus and prevent the element of surprise.
One way that is often practical for estate planning in Florida is to provide in the will for sale of the home and distribution of the proceeds in equal shares. Another possible remedy is to determine whether the individual wants his or her share in money or in the home itself. If some children want to keep the house, discussion is recommended to determine whether they are truly prepared to share the property. Where an heir chooses instead to receive funds, the distribution of an equivalent share can be made during life or by designating the individual as a beneficiary of a policy or investment account.