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Where does your home fit into your estate plan?

On Behalf of | May 27, 2022 | Estate Planning

The family home is most people’s singular most valuable asset, so it is not surprising that it’s the one that is most likely to lead to inheritance disputes.

As someone making about to make their estate plan, it is crucial to be clear about what happens to the home when you die to avoid any chance people fight over it. You also need to think about the best way to pass it on. Otherwise, you could waste a lot of money on inheritance taxes.

Here are some things to consider:

Do you have other assets that amount to a similar value?

Let’s say you have two kids. If your house is worth half a million and you also have half a million in other funds, you could leave one the house and the other the investments. Yet if your other funds do not match the house value, you cannot.

Do all your kids want the same thing?

Maybe you decide to leave the kids an equal share in the house. Jon wants to sell it and use the profits to pay off the mortgage on his existing home. Martha wants to rent it out so that everyone gets a monthly income. Jeremy wants to stay living there until he finishes his studies. Who decides? 

Can anyone afford to keep the house?

If you travel to Europe, you will see hundreds of family castles falling into ruin because the people who inherited them could not afford the upkeep. While the U.S. does not have castles, many families own houses that are too large and expensive for their kids to maintain. There is little point in them getting into debt over something you leave to help them.

Seek legal help if you are unsure about how best to treat your house in your estate plan. Examining all the options can help you make the right choice.