When people are asked what the first step is to pass their home on to their children, they often think about the financial side. They assume that they need to find out what the home is worth in the current market or what the taxes will look like if they give the house to the kids.
These are important points, but they’re not Step One. Instead, you absolutely want to begin by having a conversation. Gather the children together and ask them some important questions:
- What are your expectations for the estate plan and the house in particular?
- What interests do you have when thinking about family assets?
- Is the house even an asset that you would want?
- If the home is being rented out or used as an income property in any fashion, do you want to run it and have that responsibility?
- Do you want to live in the house with your own family?
- Do you just want to sell the house?
The answers to these questions can be very telling. If the children do not want the home — they all have their own homes and have no desire to move — then they may just want to sell it. If so, would it make more sense for you to sell the house in advance and simply leave them the money? That could save them a lot of time and work.
Alternatively, multiple children may all want to keep the home. Then you can talk about ownership percentages, caretaking roles, usage rules and everything else. You can get a plan in place.
It all starts with that conversation. As you move forward with your estate plan, you need to know what legal options you have.