Most estate planning conversations focus on wills, trusts, and taxes. Real estate shows up as a line on an asset list: “office building” or “LLC interest.”
For a practice owner, that is not enough. How your building or lease is handled in your estate plan can make the difference between a smooth transition and a painful, drawn-out mess for the people you care about.
Start with the basics: what do you actually own?
Before your attorney can help, they need a clear picture of your real estate. They should ask:
- Do you own your building, lease it, or both: own one location, lease another?
- If you own, is it in your personal name, a separate LLC, or with partners?
- If you lease, what does the lease say about death, assignment, and guarantees?
Getting precise about what you own and how you own it is the foundation for every other decision.
Who do you want owning the building after you?
Your estate attorney should push past the default assumption that “my kids will own everything.” Key questions:
- Do you want your heirs to own the building directly, or interests in an entity (LLC, partnership) that holds it?
- If you have partners in the practice or the building, do you want them to have the right, or the obligation, to buy out your share?
- Are your intended heirs actually interested in owning and managing a commercial property?
Often, the best answer is not “leave the building to the family as-is,” but “leave them the value of the building” through a buyout or structured income.
How does the building connect to your practice exit plan?
Real estate and practice transitions are tightly linked. Your attorney might ask:
- If you died unexpectedly, what is supposed to happen to the practice? Immediate sale, associate buy-out, or wind-down?
- If the practice is sold, should the buyer have an option or obligation to lease or purchase the building from your estate?
- Do any buy-sell or shareholder agreements already say something about the building, and do those terms still make sense?
The goal is to avoid a situation where your heirs own a building designed for a practice that no longer exists, with no clear instructions. Does your building help or hurt your practice sale? looks at the same question from the buyer’s side.
What cash flow does your family actually need?
It is easy to talk about buildings in terms of value. Estate planning is often about cash flow. Your attorney should ask:
- Do you want your family to receive steady rental income, a lump sum from a sale, or a mix?
- How dependent is your household on income from the practice vs. the real estate?
- If your heirs inherit a building, will they have the liquidity to handle taxes, maintenance, and vacancies?
Sometimes the most loving move is a clear path for the building to be sold on reasonable terms, rather than a large, illiquid asset your family is not prepared to manage.
What happens to your guarantees and obligations?
Many practice owners sign personal guarantees on leases and loans and then forget about them. Your estate attorney should not. Questions to cover:
- Are there personal guarantees on the practice lease or building loan that would survive your death? What a personal guarantee actually costs you explains what those are.
- Do your loan documents or lease say what happens if you die: acceleration, default, or transfer provisions?
- Are there life insurance policies or other assets specifically earmarked to cover those obligations?
You want your estate plan to anticipate these obligations so your family is not surprised by claims they did not see coming.
How will disagreements be handled?
Even well-intentioned heirs can disagree about real estate: some want to keep it, others want to sell. Your attorney should ask:
- If multiple heirs inherit interests in a building LLC, how will decisions be made: manager, voting rules, buy-sell provisions?
- Do you want to give any heir, or practice partner, a clear right to buy out others at a defined price or formula?
- Are there specific people you do not want to end up as co-owners with your professional partners?
Clear rules on decision-making and buyouts can prevent family tension from spilling into the practice or the building.
More than who gets the building
A good estate plan does more than say who gets the building. It answers who should own it, who should manage it, how it connects to the practice, and how your family gets the benefit without inheriting unnecessary stress.
If your estate attorney is not asking detailed questions about your real estate, it is worth raising them yourself. Your future self, and your family, will be glad you did.
This article is educational, not legal, tax, or financial advice. Work through your estate plan, and the real estate inside it, with your own attorney and accountant.