Toy House With Key and Gavel | Retiring With Multiple Properties | The TGQ Law Firm

Planning for the Future When You Are Retiring With Multiple Properties

When retiring with multiple properties in your name, you need to begin planning for what will happen to those properties when you pass away. Will your children or other family members inherit them? Do you have an investment business partner who will receive the properties?

A Michigan estate planning attorney from The TGQ Law Firm in Ann Arbor, MI can help describe potential pitfalls and protections to consider for the multiple properties in your estate plan. Read on to learn more about planning for retirement when you own more than one property.

Estate Planning Is Important, No Matter How Many Properties You Own

Whether you simply own your primary residence home or have multiple properties, either within Michigan or in multiple states, you need to consider what will happen to them in your estate plan. You can transfer ownership of each property through a trust or manage your properties through an LLC and divide shares of the properties between your children. Our team is here to help build a strategically planned estate plan for any situation.

If You Own Multiple Properties, It’s Important To Have a Plan in Place

Michigan is not a state that recognizes Transfer-on-Death deeds. Instead, you need to create a trust. By creating a trust, you transfer the properties under ownership of the trust, protecting them from personal debts when you pass away. You can name your family members as beneficiaries of the trust and have each receive a portion of your total properties.

You may also leave instructions for your trustee to sell certain properties in the trust and make any beneficiary not interested in receiving a property equitable for their inheritance. This could be preferable to prevent family disputes if certain properties hold more value than others.

Setting Up or Updating Your Trust and Will

If you wish to leave properties to your beneficiaries in a will, understand that a will always passes through probate before beneficiaries receive their inheritances. A will also becomes part of the public record in court. This means your beneficiaries with debts may not be able to enjoy their inheritance if their creditors seek to pursue your bequeathed property to fulfill the debt.

Trusts bypass probate and never become part of the public record. As such, even other beneficiaries may never know what the others receive for inheritance. This also means that even if your beneficiaries have personal debts, their creditors may not be able to pursue their inheritance to settle the debt.

Avoiding Probate If You Own Multiple Properties

Trusts naturally bypass probate when you pass away, as do LLCs for out-of-state probate. In cases where clients own multiple properties in different states, they may choose to create an LLC or trust for each property then roll all the properties together in a master revocable trust or LLC.

In instances where someone owns multiple properties outside of Michigan, creating an LLC can avoid out-of-state probate. The property becomes the personal property of the owner of the LLC in Michigan and will only go through Michigan probate if that property is not also in a trust.

Downsizing Your Living Situation

If you retire at 60 but don’t pass away until you’re 80 or older, what do you do in your remaining 20 years? Retiring with multiple properties means you still need to manage those properties. Whether you own multiple properties as rentals, personal vacation homes, or for equity investment, you may not want to maintain all your properties into your retirement.

While you could sell most of your additional properties, consider how selling each home could affect your tax burden, and if some homes would be better left to your children or grandchildren for their inheritance. Also consider how leaving any of the properties you own could affect your beneficiaries’ tax burdens, and if they can maintain an additional property after you pass away.

Schedule a Consultation With Our Michigan Estate Planning Law Firm

While retiring with multiple properties isn’t an issue for many, some people do reach retirement age or retire early with additional income or equity in multiple residential or commercial property investments. One of our estate planning attorneys in Ann Arbor, Michigan at the TGQ Law Firm is waiting to help. Contact us at (734) 224-3384 or schedule a free 15-minute consultation.