Selling vs. Transferring Property in Your Estate Plan
When it comes to deciding what to do with a home, business or another property you own in Missouri, you have options. A comprehensive estate plan can allow you to sell or transfer real estate to others based on your plans for the future. Whether it is best to sell vs. transfer property depends on your needs and goals. Make sure to speak with an experienced St. Louis estate planning lawyer for legal guidance.
Pros and Cons of Selling vs. Transferring Property
The decision to either sell or transfer real estate is personal. When you sell your home, you completely relinquish control over the property, home or business from the date of sale onward. The new owner gains total control after the sale. If you wish to transfer ownership of the property with no strings attached, this option is for you.
If you would rather keep some control or ownership, however, transferring the property is the better choice. With a transfer, the beneficiary or new owner that you choose gains immediate control and usage. However, you can include clauses in your estate plan that allow you to maintain some decision-making capabilities or partial ownership while you are alive.
Transferring property is best suited for individuals who wish to bequeath a home or real estate to heirs. Organizing a transfer in an estate plan allows the beneficiary to avoid the probate process and inherit the property directly, without court interference, after the owner passes away. This can come with significant savings for the new owner in terms of money, time and tax liabilities.
Tax Consequences
The way that you choose to handle property in an estate plan can have different tax consequences for you or your heirs. If you choose to sell and the property has appreciated significantly in value, this can result in large tax liabilities. Transferring the property at the current market value, on the other hand, minimizes capital gains taxes for the beneficiary.
Should you gift your home or property to an heir during your lifetime, this can have adverse tax implications. The value of this gift will count toward your lifetime gift tax exemption. In 2026, this value is set to revert from $13.99 million back to the pre-2018 value of $5 million. Keep this in mind when deciding whether to sell or transfer.
Selling vs. Transferring a Business
If you are deciding whether to sell or transfer a business in your estate plan, know that selling is generally a more complex task. Selling a business involves the transfer of ownership, possible liquidations and payment of property transfer taxes. A transfer is faster and simpler, but you will retain some connection and responsibility for the business. This could be a pro or con, depending on your goals.
Which Strategy Is Right for You?
Selling the property can provide cash for you, but it removes the property from your ownership. Transferring it does not result in an immediate payment, but allows you to pass ownership of the property to your chosen heir or beneficiary. Discuss the pros, cons and tax implications of both choices with an attorney at TdD Attorneys at Law LLC before making your decision.
Choosing whether to sell or transfer property that you own when creating your estate plan will take careful thought and consideration. Working with an experienced estate planning attorney can help, as you can receive personalized advice and information about both options. Your lawyer will identify the right strategy for you based on your unique situation. Contact us today.