Owning your own home is a cornerstone of the American dream. For many American adults, it can take a lifetime of hard work to purchase and then pay off a house. Homeownership is probably something you feel very proud about. Your home also represents a valuable asset that you undoubtedly want to pass on to your loved ones.
Have you stopped to think about the best way in which to handle your home in your estate plan? Your family and financial circumstances, the number of beneficiaries you have and several other factors will determine the best way to handle your home.
Does one person want to live in the home?
Maybe you have had a long-term live-in romantic partner since your spouse died. You may want them to stay in the property for the rest of their life for their safety and financial comfort, but you may not want to actually give the home to them because you want your children to receive its financial value.
Maybe one of your children wants to stay in the home, but you don’t want to deprive your other beneficiaries of their share of the property value.
There are ways for you to hold title so that one family member or loved one has the right to stay in the property without actually inheriting your full ownership of the property.
Will your family treat the property like an investment?
If you have multiple children, they might hope to fix up and modernize the home before listing it for sale or possibly renting it out as a source of passive income to be split among your beneficiaries. In a scenario like this, assigning joint ownership to all of your heirs can be the easiest solution for your home.
Do you expect your family to get rid of the property?
If all of your children already own their own homes or have moved out of state, they likely have little interest in maintaining your residence after you die. You may want to instruct your executor to sell the property and then distribute the asset among your beneficiaries.
Thinking about your family circumstances and even talking to your loved ones about what they would do with your home after you die can help you decide the best way to structure your estate plan when it comes to your real property.