If my father is aging and has several personal real estate properties that he wants to leave to my siblings and I, what is the best way to go about this?

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If my father is aging and has several personal real estate properties that he wants to leave to my siblings and I, what is the best way to go about this?

How best to do this – Will, form an LLC, etc?

Asked on July 8, 2014 under Estate Planning, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

The only way to direct who gets property after death is by a will. Even if the property is in a corporation or LLC, those shares or membership interest in the company owned by person A would need a will to show who gets them after person A dies. (Without a will, property passes by operation of the laws of intestate succession, which may give the property to the people the property owner wants, such as children--but having a will is the only way to affirmatively direct what happens to the property after death, rather than leaving it to the operation of law.)

There are *many* ways to pass property while someone is alive: for example, real estate could be jointly owned with others, so that when one person dies, the other owner(s) take his share of the property. The property could be in a trust. The property could be owned by a corporation or LLC which has several shareholders or members and a succession plan directing what will happen after one of the business owners dies. Etc. All of these schemes have different tax consequences, both during life and upon death; and they all affect the ability to sell, mortgage, etc. the property during life, since there is not a single person as owner who can do whatever he likes. (That is, if your father does any of these things to involve you in ownership while he is still  alive, that means he will not be the only person with control and/or an economic interest in the property; there will be limits on what he can do with it.)

Since there are so many different options, your father, you, and your siblings should consult with an attorney (either a specialist in elder law, in trusts and estates, or possibly real estate) to discuss your exact goals, the different options, and the effects of those options, and then help you structure things the right way for what you want.


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