Personal Finance

Estate Planning for Investors: Insight From a Real Estate Attorney

Expertise: Business Management, Personal Finance
79 Articles Written

Disclaimer: This article does not constitute legal advice. We recommend you seek the counsel of an attorney familiar with your specific situation and market to ensure you make the best decisions within your real estate business.

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Estate planning for real estate investors is unlike that of others. We’re a different breed of people, who have unique concerns throughout our lives—and beyond.

We have to think about what will become of our real estate assets at the end of our lives, succession planning for our businesses, and of course, transferring those assets to our beneficiaries without paying unnecessary expenses.

Well, I’m a real estate attorney who also handles estate planning, and I’m here to help. All of my clients are investors and so am I, which means I can offer you some insider’s insight.

So let’s get right into the essentials of what you need to know about estate planning for real estate investors.

Related: 4 Questions Every New Investor Needs to Ask Their Attorney

Estate Planning 101: The Living Trust and Pour-Over Will

For real estate investors who may be buying and selling assets frequently, it is important to know that you would normally update your estate plan each time you make a significant purchase or sale. This could present a challenge for an active investor with many properties, but the problem can be easily addressed by using a pour-over will.

For the real estate investor, a pour-over will pairs well with a living trust, as this type of will passes all property you own to said living trust upon your death. This ensures a smooth, private transition of your assets. As such, using these tools together is a smart tactic for a clear, easy-to-follow business succession plan that you direct.

Consultation between a Businessman and Male lawyer or judge consult having team meeting with client, Law and Legal services concept.

Estate Planning During Your Life

Though best known for anticipating death, estate planning can also be important while you’re still alive. Here are the tools you should understand.

Medical Power of Attorney

Any of us could become incapacitated as the result of a medical emergency. As several high-profile cases have brought into the public consciousness, these tragedies can be compounded when no estate plan exists.

A durable medical power of attorney can let you control who will make your medical decisions if you are ever unable. “Durable” just means the document stays in effect if you are incapacitated.

Times in your life when you may want a medical power of attorney include if you have a chronic, ongoing health condition, are planning a surgery, receive startling health news, or have other concerns for your well-being. If this hasn’t happened to you, that’s wonderful. But the reality is we can all get sick.

This piece of your estate plan gives you peace of mind that if you aren’t able to make decisions for yourself, someone you trust will. Since you pick the person who makes those decisions when you create the documents, you should know that it’s important to update your power of attorney if you experience a major life event, such as the death of your chosen shot-caller, divorce, etc.

man resting chin on hand looking as though he's deep in thought

Financial Power of Attorney

As an investor, you want to grant financial power of attorney to a trusted individual. After all, rents must be collected, tenants or management handled, and payments must be made if your business is to survive in your absence. Financial power of attorney grants these powers and can be created independently or alongside medical power of attorney.

Related: How to Legally Disinherit Someone Using a Will or Trust

Estate Planning Is Part of Your Asset Protection Plan

Estate planning really is a critical part of your asset protection plan. The ultimate goal is controlling assets and keeping your business going.

Properly executed, your estate plan can ensure that your business outlives you. But it is essential to get the help of a qualified attorney.

I’ll leave you with a personal opinion on what to look for in that attorney. A full-service asset protection firm or an attorney who has investing experience (or many investor-clients) will typically be excellent choices. Whatever you do, just get it done for your own peace of mind.

Disclaimer: This article does not constitute legal advice. We recommend you seek the counsel of an attorney familiar with your specific situation and market to ensure you make the best decisions within your real estate business.

Do you have an attorney? Do they have experience working with real estate investors? 

Leave a comment below!


Scott Royal Smith is an asset protection attorney and long-time real estate investor. His law firm, Royal Legal Solutions, helps thousands of real esta...
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    Tracy Petersen
    Replied over 1 year ago
    Actually just a quick question. I purchased a home from an investor and paid it off in January. Waiting to close and get deed in my name. I just found out investor still owes on my home and is now filing bankruptcy. Will I lose this home and all the money I paid out? Thanks in advance Tracy
    Kris Patel Investor from Arroyo Grande, California
    Replied over 1 year ago
    I am in CA, have 2 nd home in Austin. Mortgage in my name only, but title has me, wife, son n wife as tenant in common. How to do as part of living trust? Thanks
    Loren Clive Residential Real Estate Broker from Haiku, HI
    Replied over 1 year ago
    Confused. If you have a living trust you’re supposed to title all your assets into the trust. that’s the way it works. If you die your stuff is in the trust. What is this pour-over will nonsense? This is a hard topic to cover in such a short article as laws vary state-by-state.
    Weston Couch Attorney from Austin, Tx
    Replied over 1 year ago
    Hi Loren, I work with Scott. A pour over will is just a mechanism that allows assets that aren’t already in the living trust when you pass away to automatically pass into it. It might always be convenient to have assets in the Living trust while you’re still around, and this allows people to still make sure they end up there if they desire. Does that help answer your question?