Inheriting property can be both a gift and challenge. As a trustee, you’re not just receiving real estate, you’re inheriting family responsibilities, property maintenance and tax implications. In Hawai‘i, the complexity increases given the unique real estate landscape. So what options can maximize the potential of your inheritance?
Consider the 1031 Exchange, which permits trustees to swap inherited investment properties for another “like-kind” property while deferring capital gains taxes in the process. This tool can be immensely advantageous for trustees, allowing them to diversify an inherited portfolio, enhance investment value, ensure a more consistent cash flow and increase recession resiliency.
The 1031 Exchange can be pivotal in real estate planning. While there are essential criteria to meet (the property, for instance, must be for investment and not a primary residence), the benefits can be significant. However, given the tight windows for property identification (45 days) and purchase completion (180 days), expert guidance is crucial. Working with an experienced real estate planning team can lead to informed and lucrative decisions. If you’re a trustee uncertain about your options, the 1031 Exchange can offer you solutions to reach your goals.