Keeping Your Home in the Family

For a variety of reasons, sometimes it is important to a person that a home stays in the family after their death. Maybe there is a specific child or other beneficiary who could really use a roof over their head. Maybe the home has been in the family for a long time and has sentimental value. Whatever the reason may be, ensuring that real property stays in the family can be more complicated that you might think.

Sure, you could just do nothing during your lifetime and then haunt the place until strangers vacate. But chances are you’re looking for a more solid plan.

Without making any specific bequests in your documents, your home will be a part of your “residuary estate” and will be divided up between the beneficiaries who you name. For instance, if you have three children and leave everything to them in equal shares, then the home will be a part of the estate that all three children inherit. Those three children would need to decide how to handle the property. If even one of them wishes to sell the property and split the proceeds, it will be very difficult for another child to keep the home.

So perhaps you decide to leave the home to a specific beneficiary. There are still a number of important considerations and decisions to make. First, will you leave the property outright or in a trust? If you have concerns about your beneficiary’s ability to make sound decisions about money, you might want to place the home into a trust to prevent them from selling. Second, you need to consider whether to give the property subject to any mortgage or if you want to direct your estate to pay off any loans so that it can be inherited without debt. Last, even if the property is without debt, there will be carrying costs. You need to consider whether these are costs that your beneficiary can handle or if you should provide assets sufficient to cover those costs.

Navigating these decisions can be daunting. Be sure to speak with an experienced estate planning attorney to discuss your options.