Estate Planning for Real Estate Investors – Trusts vs. Wills

[William Thompson]

Most of us spend years hustling to build a real estate portfolio… but here’s a question I don’t see asked often:

What happens to your properties when you’re gone?

As a CPA, I’ve seen a lot of investors put off estate planning until it’s too late. The truth is: having a Will alone vs. setting up a Trust can make a huge difference for your heirs, especially if you own multiple rentals or out-of-state properties.

Here’s the quick breakdown:

Wills

-Cheaper/easier to set up

-You can decide who gets which property

-BUT: everything goes through probate (public, time-consuming, sometimes costly)

Trusts

-Avoid probate → properties transfer directly to heirs

-Keep your portfolio private (not public record)

-You can set rules (“rental income goes to my kids until they turn 25”)

-More expensive to set up, and you have to retitle properties into the trust

Key tip for investors: If you own property in more than one state, probate could be required in each state. A Trust can help avoid that mess completely.

Curious for the community:

-Do you have your rentals in a Will or a Trust?

-Has anyone here gone through probate with real estate before? How did it affect the family or the portfolio?

Would love to hear different perspectives—especially from those of you who already built estate plans around your RE holdings.

[Henry Clark]

OP another estate planning tool is life insurance. Especially for RE investors. If you die and get caught in the middle of a BRRRR, development, etc your property is worth Pennys. Your family won't or can't complete. With insurance they can just sell the property. Take the hit. Knowing insurance will cover the loss. Way less stress.

We took out multiple policies so we could stagger our risk.  Keep in mind your age and health can change in getting policies.   So instead of doing one large policy we broke it into 3 policies.  As some exposure goes away, you can cancel one policy without renewing all of a large policy.  

Not an estate or will decision.  But far more positive impact on working thru a death of the RE investor to the family.