We once represented a client, “Gertrude,” who engaged in some do-it-yourself estate planning: she transferred real estate to her seven children and reserved a life estate for herself so she could continue to collect rental income from the house. This sounds like a good idea on paper: the property was already in the names of our client’s heirs so it would avoid probate, but she could still collect the rent. It looked like she had all of the good things about owning real estate (i.e., it was producing income for her) while avoiding the liability of probate court.
The problem came about five years after transferring the deed to her children when Gertrude decided to sell the house and it was not in her name. Only five of the seven children would deed the property back to her and the other two were being stubborn. Even though she had a buyer, it took over a year of her life plus attorney’s fees just to get to a point where she could sell the house.
It is crucial to have clear goals in estate planning. If we had been able to meet with Gertrude five years ago, we would have had a conversation with her to help her determine the best thing to do with the property: “Do you anticipate ever selling the property? You do? We don’t recommend deeding it to seven different people. Let’s discuss some other options to avoid future issues with getting all seven people on the same page.”
Estate planning has a reputation for being costly, but I can almost guarantee you that a solid estate plan costs less than litigation in terms of time, money, and aggravation. Whenever you feel that it is time to make some estate planning decisions, feel free to give us a call at 740.346.2899 to request one of our FREE guides or to schedule a free telephone consultation with us.