There are many things involved with buying Maui Real Estate and the Fine Island Properties Team can guide you through the purchase process. After you buy you think about decorating, etc. but one overlooked area can be Estate Planning for your new vacation home.
All Estate planning should be done with the assistance of a Professional Attorney, a Tax Advisor, and an Escrow Title Service Company but here are some planning techniques to think about:
1. Revocable Living Trust: Provides for management of your property in life and death and can help to avoid probate.
2. Power of Attorney: Make sure your power of attorney allows you to name who will care for your property should you become incapacitated and that it is legal in the state of Hawaii.
3. Family Limited Partnerships: An entity uses to provide asset protection for partnership property from a creditor of a partner, and enables parents to gift, and reduces transfer tax values.
4. Charitable Remainder Trust: This would be great for vacation condos here that are generating income. The trust owns the property as a charitable contribution, but the income stream may be retained by the grantor of the property. This may enable you to receive a tax deduction, and avoid captial gains tax on transferred property.
5. Fractional Interest Gift: Many condos on Maui do not allow fractional ownership. Please refer to the CC&Rs for each property. If allowed this may transfer a partial piece or fraction of the property to donees and obtain fractional interest discounts for estate and gift purposes.
6. Private Foundation: This would apply for many of our Luxury Homeowners here on Maui. Use by higher wealth families to receive any otherwise taxable property as to eliminate estate taxes on the death of a surviving spouse.
As previously mentioned these are tips and by no means meant to convey legal guidelines. Please consult an Attorney licensed in the State of Hawaii, a Tax Advisor and an Escrow and Title Officer for further information. I have referrals for several. Just contact me. To search the Maui MLS for great Maui Real Estate go to: www.FineIslandProperties.com
Aloha, Gina Duncan, R(S), ABR, e-Pro