Pass Your Family Home on to Your Children
You may be considering passing your family home on to your children. If that is the case there are several different estate planning tools and legalities you should be aware of to make certain that the transfer is done correctly and your children will benefit from this real estate in the future.
Including the Family Home in Your Last Will and Testament
A Last Will and Testament (Will) is the legal document that most people are familiar with that will allow a person to transfer their property and assets following their death to named beneficiaries and heirs. Once a person passes away, the estate will go through probate to ensure that all debts are paid and assets are distributed appropriately according to the estate planning documents and the law. A person may choose to legally transfer their family home to one or more beneficiaries in this estate planning document.
Including the Family Home in a Living Trust
A will is not the only way to transfer property or real estate. A living trust is a document that will allow you to pass real estate and assets to your beneficiaries after you die, however, it will not go through the probate process. The advantage is that this real estate will be transferred upon your death to your children much more quickly and without the expensive probate process.
Always Use the Correct Legal Terminology
As you begin to consider how you want to transfer your family home to your children, you will want to make sure to include the correct legal terminology in all of your estate planning documents so that the courts will follow our wishes. You must use “transfer on death” or “joint tenants with right of survivorship” depending on your wishes. Visiting with an experienced estate planning attorney can help ensure that your wishes are carried out regarding the family home after your death.
Selling Your Family Home Directly to Your Children
You also have the option of avoiding probate and the entire issue after you die if you sell your family home to your children during your lifetime. It is important to note that you will need to sell it to them at a somewhat fair market value price, or instead loan your children money so that they will be able to afford to purchase it.
Qualified Personal Resident Trust
One other way to make sure your children get the family home after your death is through a qualified personal residence trust. This trust allows the parents to live in the home rent-free for a specified period of time, and the children hold ownership of the property. After that period of time expires, the parents will need to then pay fair market value rent for living in the home. While this is not a viable option for all people, it can be useful in some situations.
Contact an Experienced Estates and Trusts Attorney