Options for Transferring Family Heirloom Real Estate

If you want to pass real estate (a family cabin, ranch or other homestead that you want to stay in the family) to your minor children, what are your options?

The difficulties lie in the fact that minor children cannot own real estate. Without a trust, there would have to be a conservatorship until they turn 18. Also, how would the children (or the trustees or conservator) pay the taxes, upkeep, mortgage, and other expenses?

In this case, there are two main options. First, you can create a trust to hold the property now and deed the property into it now. You establish trustees and alternate trustees now. This gives unity of management immediately and can be arranged to deal with the future situation when there will be multiple 5 beneficial owners with differing uses and interests in the property itself.

Second, create testamentary trusts for your kids in your will. The property interest will have to pass through probate, but the trustee will control the property for the kids until the distribution age. I suggest that there NOT be a specific age at which to inherit the property.

I have arranged the options in order of preference, in my opinion.

If you have questions, call me at 602-443-4888 or visit my website at www.delougherylaw.com. Paul