§1031 for estate planning...

I heard I can use §1031 for estate planning, but how?

Selling your old property and buying several new properties can be a very useful tool for estate planning. Here's how it can work: You can sell a large old property and buy three smaller properties -- one for each of your three children to 'manage.' The children can even be involved in making the decisions about which properties to buy. After your death, each of the three children would inherit the property they are managing.

Tailoring the property to your children's situation could be beneficial to them in other ways. For example: Your teacher child may select a "fixer upper" -- property where he or she can invest "sweat equity" during the summer. Your doctor child, on the other hand, may benefit from bare land -- property that appreciates, but avoids rental income that would be highly taxed.

--The Experts