From Duplexes to Dream Homes: Protecting Your Real Estate in an Estate Plan

Whether you own a rental duplex, a vacation cabin, or the house you plan to grow old in, real estate is one of the most valuable and emotionally significant assets you can pass on.

But without proper planning, that same property can become a burden to your loved ones—tied up in probate, vulnerable to disputes, or subject to avoidable taxes.

That’s why estate planning for real estate isn’t just about deciding who gets your property. It’s about making sure it’s passed on efficiently, affordably, and with clear legal protection.

Let’s walk through how to protect your property—no matter the size or setting—using tools like trusts, titling strategies, and tax-smart planning.

Title Matters: Ownership Types and Probate Exposure

Before you even think about passing real estate through your estate plan, it’s important to understand how the title of your property affects what happens to it when you die. Ownership type can determine whether your property moves smoothly to the next generation—or gets stuck in probate.

1. Sole Ownership

• What it is: Property held entirely in your name.
• What it means: The property will go through probate upon your death.
• Risk: Probate can be time-consuming, expensive, and public.
  
  

2. Joint Tenancy with Right of Survivorship (JTWROS)

• What it is: Two or more people own the property equally, and when one dies, the surviving owner automatically inherits the deceased’s share.
• What it means: Avoids probate for the surviving owner.
• Limitation: Doesn’t allow flexibility in distributing your share of the property through your estate plan.
  
  

3. Tenancy in Common

• What it is: Two or more people own specific shares of a property (not necessarily equal), and each owner’s share passes to their chosen beneficiaries—not automatically to the other owners.
• What it means: Each owner’s share will go through probate unless additional planning—like a trust—is in place.
• Use case: Useful for business partners, blended families, or investment co-owners.
  
  

How your property is titled plays a major role in whether it will pass efficiently to your beneficiaries—or end up tied up in court. If avoiding probate is a priority, you’ll want to evaluate how each property is currently titled and whether a trust can help simplify the transfer process.

Using a Trust to Transfer Property

A real estate trust—typically a revocable living trust—is one of the most effective tools for passing property to your heirs.

Why place property in a trust?

• Avoid probate: Your property transfers to your beneficiaries without court delays or public disclosure.
• Plan for incapacity: If you become ill or unable to manage your affairs, the successor trustee can manage or sell the property.
• Control the terms: You decide who gets the property, when, and how. This is especially helpful for second homes or investment properties.
  
  

Real Life Example:

Sarah owns a rental duplex in her name. If she passes without a trust, her family would need to go through probate to transfer or sell it—possibly dealing with renters, taxes, and delays along the way.

If the duplex is titled in her trust, her successor trustee can manage or sell it immediately according to her wishes—no court required.‍

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To use a trust effectively, you must retitle the property into the trust. Simply creating the document isn’t enough. Deeds must reflect the trust ownership.

Tax Considerations and Multiple Properties

Estate planning for real estate isn’t complete without considering tax impacts—especially if you own more than one property or expect your estate to exceed exemption thresholds.

1. Step-Up in Basis

When a person dies, most assets—including real estate—receive a “step-up” in cost basis. This means the property’s value is adjusted to its market value at death, potentially reducing capital gains taxes if heirs sell it. But if you gift property during your lifetime, this benefit may be lost.

Estate plan tip: Leaving property through a trust at death often preserves the step-up in basis.

2. Out-of-State Property

Do you own property in more than one state? Without a trust, your heirs may face ancillary probate—a separate court process in each state where property exists.

Estate plan tip: Place all properties—regardless of state—into a revocable trust to avoid multiple probate proceedings.

3. Rental and Investment Properties

If you own income-producing properties, consider using a trust in combination with an LLC.

• The LLC can provide liability protection.
• The trust ensures a smooth transfer of your ownership interest.
  
  

Estate planning tip: For complex portfolios, review your real estate trust alongside your business structure for tax efficiency.

Conclusion: Real Estate Deserves Real Planning

Your home may hold memories. Your rental properties may fund your retirement. Your cabin in the woods may be the legacy you want to pass on. But without clear planning, all of that can become tangled in legal red tape.

Estate planning real estate isn’t just for the wealthy. It’s for anyone who wants their property handled with care.

So whether you’re holding onto a duplex, a dream home, or a handful of short-term rentals, take the time to title things correctly, use a trust when appropriate, and consider how taxes and location might affect your family’s future.

Because your property deserves more than a will—it deserves a plan. Take the first step and book a free 15 minute call with Michael Anastasio.