Today is for Love! But what about death and taxes?
Posted February 14, 2021 in Real Estate Trends
Last month, I wrote about community property. Then, I realized I should have saved that subject for Valentine’s Day! So . . . not to be Debbie Downer, but today’s subject is death and taxes; specifically probate of real estate assets and excise tax.
When an owner of real estate dies, their interest in that property will transfer to their devisees (persons or organizations named in their Last Will) or their heirs (if they don’t have a Will), or their Successor Trustees (on behalf of their beneficiaries, if they have a Trust), or their beneficiaries (if they have recorded a Transfer On Death Deed). Probate is the process by which a Personal Representative is approved by the Court to act on behalf of the deceased person to distribute their assets.
To complicate matters even further, it is possible for all of their heirs (and devisees, if there is a Will) to transfer real estate without probate, if all of them agree. That is called a Lack of Probate process.
It’s starting to sound complicated, right?
That’s why it’s a good idea to seek out a good estate planning attorney now, to make sure your real estate goes to whoever you wish upon your death. We work with the best estate planning attorneys and probate attorneys in town to help accomplish your goals. Many times, we’re asked after a death, “what happens now?” Again, if all heirs and devisees are in agreement, usually transfers after death are possible. If there is no Will and their heirs do not agree, or cannot be located, that is where the trouble starts.
What’s the taxes part? Most transfers by inheritance (no Will), or devise (Will), or Transfer On Death Deed, are exempt from Real Estate Excise Tax, which is 1.6% of the sales price or value of property if less than $500,000. The rate goes up as the property price or value goes up. An estate selling it to a third-party is excise taxable as any other sale. For advice on capital gains taxes and estate taxes, we’ll refer you to one of the many capable CPAs in town.
Clark County Title is ready to help you and your clients with whatever you are doing in real estate: buying, selling, refinancing, or settling an estate. Our staff is the best in the business, and we’ve been in the business of title and escrow since 1980.
If you have questions or concerns about real estate or title insurance, please call! If we don’t know the answer, we can refer you to one of the many local experts in all areas of real estate to get you the information you need.
We wish you and yours a Happy Valentine’s Day!
From your friends at Clark County Title,