67% of Americans do not have an estate plan. Without an estate, they don’t have full control over who their assets go to after they pass.
There are many different types of estates that exist today, each with its own rules and beneficiaries. To help you understand the ins and outs of this complicated subject, we’ve put together this list of different types of estates and the most common ways they’re used in modern America.
Freehold Estate
A freehold estate means that a person has free use and access to land or property, but not ownership. The person has permission from another owner to live there.
If they want to sell or develop their freehold estate, they must get permission from their landlord first. A leasehold estate works in a similar way, except that you do own part of your home.
Leasehold Estate
The leasehold estate is a type of concurrent estate, which we describe in further detail below. A leasehold estate involves a lessee’s rights to rent, use, and occupy the property under an agreement with an owner. Leasehold estates are limited to terms of up to 999 years, after which they revert back to freehold estates.
Concurrent Estate
A concurrent estate is a will and trust combined into one document. This can be beneficial to you because it saves time and money, but more importantly, it makes sure that your property passes according to your wishes.
Equitable Estate
Any assets that fall under an equitable estate are subject to estate tax avoidance. These assets must be held in a trust, but upon your death, anyone you wish can inherit them.
If you are looking for a way to avoid paying estate taxes, it is worth considering an equitable estate. This kind of will allows for more freedom and flexibility than a typical will would offer.
Non-Freehold or Less-Than-Freehold Estate
Non-freehold estates include leasehold and service tenancies. Most often, these are for commercial properties rather than domestic ones.
In a leasehold estate, tenants pay rent to use their property. Service tenancies like those in non-freehold estates occur when one tenant provides services to another in return for fees or dues.
Types of Estates: How Can an Estate Planning Lawyer Help?
An estate planning lawyer can help you decide which of these types of estates is right for you. Maybe after reading this guide, you have a general idea of what you want, but a good estate planning lawyer will help you feel secure in your decision.
Lawyers specializing in estate planning can help point out different options while assessing your needs. Then, you both can choose an option that maximizes your assets and ensures future generations can handle your affairs in accordance with your wishes.
Estate Planning Done Right
Having a good understanding of the different types of estates helps you plan your estate your way. Once you set aside the plans for after you pass, you get to enjoy life in the now.
There’s nothing like feeling secure as you live the life you’ve always wanted. For more lifestyle tips, check out our other blog posts today!
