Many Virginians who own real property or homes consider those to be their most valuable asset. When we get to a certain stage of life, we begin to consider how we might pass the benefits of this asset along to our loved ones when we pass. Here are a few ways to set up your estate planning using a will or trust in order to leave your real estate to your loved ones.
First of all, you can give it to them outright. “Fee simple absolute” is the form of possessory interest in real estate with as few restrictions as possible in the modern property-holding landscape. This is the most common ownership in America, and it’s what people usually think of when they consider the concept of ownership: the person who owns it can do (almost) anything they want to with it (subject to zoning, environmental protection laws, and so forth). This sort of interest in the land can be passed on wholesale to another person through a will (subject, of course, to probate) or through a trust.
Another way to pass the land on is to give it to someone for life and then to (for example) charity, under the “life estate” concept. Life estates are grants of ownership for a period of time that is limited, usually by the life-span of the person to whom it is given for possession. The idea is that this person will live on or use that property and treat it as their own—except that they can’t sell it!—for the remainder of their life, at which point it passes to another person or charity that the initial owner has determined. (So, for example: people sometimes grant one of their children a life estate so they can ensure that their child will have a place to live for the rest of their life, but that the property will pass to their favorite charity when their child’s life ends.)
Sometimes a land owner wants their favorite charity to have the land right away—but doesn’t want the charity to keep the land if it stops being the sort of charity it is at present (such as by ceasing to operate as a nonprofit). In this case, they can opt to pass down the property under “fee simple subject to condition determinable.” This requires the new owner (the charity in our example) to meet particular conditions, put in place by the owner who sold or transferred the land to them, in order to continue to own the land. If the condition is violated (such as by the charity ceasing to operate as a nonprofit), then the property ceases to belong to the charity, and the legal right to it reverts to the previous owner’s heirs.
Confer With Us About Transferring Property Interests
Obviously this is just a brief overview of forms of ownership that can be passed down. If you want to determine which form of real property ownership may be passed on as part of your estate, attend one of Promise Law’s free estate planning workshops. These workshops provide a great foundation of information that everyone needs to be able to make good planning decisions. Moreover, if you attend a workshop you also get a complimentary one-on-one consultation with one of our attorneys. Contact us by using our convenient online form or by calling us at (757) 690-2470.