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You're Going to Die -- Here Are the Best Ways to Deal With Your Home

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You're going to die.

Some day, I mean. Probably not anytime soon. Hopefully.

Of course, no one likes thinking about it. But when you shuffle off this mortal coil, you're going to leave stuff behind. If your worldly possessions consist primarily of a bunch of crafts you've bought on Etsy or a really awesome collection of '80s Transformers action figures, that's not a big deal. (Unless those Transformers are still in the original packaging, but that's another story entirely.) If you're leaving behind modest assets, the government doesn't particularly care what happens to them and your heirs can pretty much do whatever they want with them.

But if you have a home or land that you want to leave to loved ones, things can get complicated (even if you have a will). There are, however, a few ways to uncomplicate things before you go the way of all flesh. Let us guide you through it. (Not the dying part.)

Why a simple will might not cut it

Let's say you leave behind two kids, as well as a three-bedroom home. You had a will, or maybe you didn't. Frankly, it doesn't really matter. As your heirs, the kids will have to wait until after the property passes through probate court -- which can take months and can be scarily expensive -- to legally own the home. What's more: Anything that passes through probate is subject to taxes, which can be hefty when you're talking about property worth hundreds of thousands of dollars. And only once it's done can your children either take title to the house or sell it.

Seriously, it's not a fun process. There are, however, a few ways to avoid the ordeal, and even get around paying transfer taxes on real estate.

1. Tenancy by the entirety

If you're married and own property together, you probably don't have to do much to ensure your home is passed on to your spouse. If both spouses have their name on a deed, most states recognize what's called tenancy by the entirety. Under this legal doctrine, when one spouse dies, everything he or she owns simply passes to the other spouse. That's it. No probate, and no time-consuming title transfers.

2. Joint tenancy

But let's say you're not married, or you want to pass your property on to some other relative. You should prepare by transferring part of your interest to that other person to create a joint tenancy. It's basically the same as tenancy by the entirety, but you don't have to put a ring on it.

"The easiest way to transfer title is through tenancy by the entirety or joint tenancy," says Steven Thayer, managing partner at the Chicago-based law firm Handler Thayer LLP, which deals in real estate and property law. "That way ownership automatically passes to the other person."

For many people, though, there's a downside: What if you don't want the other party to be able to control the property during your lifetime? To get around that, you can always create a living trust.

3. Living trusts

Maybe you've heard this term before, but you weren't sure what it meant. Putting property in trust means that you are letting someone else (the trustee) hold it for the benefit of another person (the beneficiary). But when you create a living trust, you can act as the trustee of the property as well, choosing to pass it on to another person only when you die. And if you change your mind and want to name a different beneficiary, you can do that, too.

The actual living trust document can get a little complicated, so it should be drafted by an attorney, who will then have to transfer any property -- including real estate -- into the trust. The good news? This transfer is usually tax-free.

You can name a trust anything you want, so even though the deed to the property is publicly recorded, it's hard to determine who the exact beneficiary is.

"That you don't know who owns it is one of the biggest benefits of a living trust," says Thomas Handler, the other name partner at Handler Thayer LLP. "This keeps the property out of probate, and also avoids con men and hackers coming after it."

4. Land trusts (if your state has them)

Similar to living trusts, some states also recognize land trusts. Land trusts work exactly like living trusts, and offer the same anonymity and ease of transfer. They also require a setup fee, and an annual fee on top of that, though typically this fee is less than $100. But unlike a living trust that can hold all sorts of assets, a land trust can hold only one thing: land.

"The living trust offers a lot more flexibility," Handler says.

Because of this, land trusts are usually set up only when someone wants only to pass down real property, or as part of a larger estate planning strategy. But they're legal in only a few states, so even if you want to pass down land, you'll probably have to set up a living trust to do it.

The best time to prepare is now

So you're going to die, and it's going to suck for you and everyone around you. But if you own a house, you can make it suck just a little less by setting up an estate plan for someone else to take over your property when you're gone. And they'll probably appreciate a house a lot more than some old Transformers toys. So get started now, and save your loved ones a load of hassle and taxes. They'll remember you fondly for it -- we promise.