If nothing else, the past few months have given many of us a greater appreciation for the value of our homes. A home is typically the largest non-financial asset Americans own at the time of death. As such, the transfer of one’s home is often a major consideration during the estate planning process. Whether the goal is to avoid probate, minimize capital gains, or attempt to qualify for Medicaid, there are several ways a home can be transferred through an estate plan.

If you have been in your home for a number of years, the value of your home has likely appreciated markedly since the time of purchase. Therefore, simply gifting your home to a loved one during your lifetime could have significant capital gains tax implications. So, what are some effective ways to plan for a transfer of your home while minimizing capital gains? Below are a few options:

1. Living Trust: By transferring a home into a living trust, the home is immediately taken out of the original homeowner’s estate. This means that when the original homeowner passes away, the transfer of his or her home will not involve a probate court. Upon the death of the original homeowner, a home that has been placed in a trust can be sold and proceeds distributed to loved ones with the benefit of a stepped-up basis for capital gains considerations.

2. Life Estate: By reserving a life estate in a home, the original homeowner maintains the right to live in the home during his or her lifetime. Upon the original homeowner’s death, the home transfers (with a stepped-up basis) to the named beneficiary. It is important to keep in mind that the original homeowner gives up many ownership rights to the property, including the ability to mortgage or sell the home, during his or her lifetime.

3. Transfer on Death Deed: Also known as a Lady Bird deed, a transfer on death deed allows the original homeowner to maintain full control and possession of the property during his or her lifetime. Upon the death of the original homeowner, the home will transfer to the named individuals outside of the probate process.

When all factors and options are taken into consideration, an estate plan can be a very useful tool for arranging the transfer of a home. To learn more, check out this recent article published by Forbes.

A huge thank you to so many who shared and took advantage of the free health care power of attorney and living will promotion over the past 4 months! Wishing everyone a fun and safe 4th of July!

School is out and summer is finally here!  For many, that means it's time for a long-awaited vacation away from home.  Whether you are heading to Disney World, taking a cruise, or relaxing at a nearby lake this summer, make time to review your estate plan before you take off.  Below is a quick and easy checklist to make sure your plan is ready to go:

1. Review Beneficiary Designations - If you have a will, you have probably designated beneficiaries to receive your probate assets (meaning assets that will pass through the probate process instead of automatically) if you pass away.  Keep in mind that non-probate assets such as retirement accounts, life insurance policies, and other financial assets may include beneficiary designations as well.  Transfers to these beneficiaries will occur almost automatically and outside of the probate process upon your death.  Take a quick look at your probate and non-probate beneficiary designations to make sure your assets will transfer according to your current wishes if something happens to you.

2. Update Powers of Attorney - It is important to make sure you have powers of attorney established in the event that you are in an accident and need someone to make medical or financial decisions on your behalf.  If you have not established powers of attorney and something happens to you, a court will intervene to appoint someone to handle these decisions on your behalf.  This process can be expensive and time consuming for your loved ones.  Planning ahead will save time, money, and headaches for everyone involved.

3. Designate a Guardian - If you have young children, you will want to make sure you have made a guardianship appointment in your will.  If you do not select an individual to take over guardianship of your children in the event of your death, a court will make a selection instead.  Additionally, you will want to select a trustee to manage any assets you plan to pass to young children should something happen to you.  This includes assets passed by will, or through life insurance polices, retirement accounts, and other non-probate assets.

4. Make Documents Accessible - Before you leave for vacation, store your estate planning documents in a safe place, and let your loved ones know where they can be found and how they can be accessed if necessary.  A lost or hidden estate plan will be of no use to anyone.

5. Don't Wait! - You have spent months or even years planning and saving for your vacation, so why put off updating your estate plan until minutes before you leave?  Updating your estate plan doesn't have to be arduous - get started today!

Have a safe and happy 4th of July weekend!