A home is often your most valuable asset. And if you’re a parent, you probably want your children to inherit your home. However, it takes estate planning to ensure that the family home stays in the family.
Options to Pass Your Home to Your Children
The estate planning process provides four options for leaving a home to one or more children:
- A will. This legal document allows you to specify whom you want to inherit your assets. All assets included in a will go through probate, which is a court-supervised process for ensuring that the transfer of assets to your beneficiaries is in compliance with the will’s terms. However, any debts you owe when you die will have to be paid first. If you have multiple beneficiaries, each will inherit an undivided interest in the home. This means that they have to agree on its disposition, which might be difficult if any siblings are estranged.
- A living trust. This allows you to transfer the home to the trust and to manage and benefit from the asset. A living trust avoids probate and the related expenses, but outstanding debts will still need to be paid first. Any potential for conflict between beneficiaries is addressed by appointing a trustee as the decision-maker over the assets.
- Joint ownership. Owning property jointly with another individual can mean the property will pass to that other owner upon your death. However, owning property jointly with people other than your spouse can create issues and should be considered carefully before you purchase the property.
- Transfer on death. Often you can name a beneficiary or beneficiaries who are to receive your property upon your passing. This option allows you to continue holding the property in your own name, and avoid probate.
Consult a Lawyer
Each of these estate planning options has benefits and drawbacks, which means that the best option depends on your goals, finances, and other factors. The estate planning attorneys at TuckerAllen can help weigh these factors and guide you through whichever process you choose.