More on Estate Planning for Real Property - The Bundle of Sticks
In law school, the study of law relating to real property (land) is often introduced as a “bundle of sticks.” Many rights come together to form the “ownership” or real estate. Some examples of the various rights include:
The right of possession
Lien rights, such as a mortgage
When planning an estate, it is important to understand the various rights that may exist in the land. These rights can affect value and they can affect how or if you can give the land to beneficiaries of your estate. For example, if someone is the owner of a life estate, they have no right to transfer their interest in the land upon death. Conversely, if a person owns land that is subject to a life estate, they can give a beneficiary that reversionary interest in their estate planning, but they could not transfer the present right to possession.A good estate plan should take into consideration your unique circumstances and the unique nature of the assets you own. What you own, how you own it, and who else has rights in it are important details when real property is involved in the estate plan.